We are excited about Cleveland BioLabs, Inc. (CBLI) robust pipeline of clinical candidates, its unique positioning, and the immense market potential if the company can successfully develop and commercialize the compounds. We maintain our Buy rating on the stock.
Our recommendation is based on the company's attractive and unique medley of compounds which represent solid market potential. The company has developed the Protectan and the Curaxin series of compounds based on the concept of apoptosis or, programmed cell death. These compounds may find usage in a wide range of markets from cancer treatment to biodefense to tissue protection.
These compounds may also double up as a second-line treatment for patients failing treatment with G-CSF and aid in reducing the side effects associated with cancer treatment. Additionally, the safety profile exhibited by these compounds in preclinical and animal studies along with the expedited development status granted to them further enhances our conviction in the future prospects of the company. We expect the company to launch one of these compounds in 2010.
We believe that valuation-wise, the stock offers significant long-term gains. The company is uniquely positioned, with little or no competition for the Protection series of compounds. Additionally, given their unique mechanism of action, Curaxins have demonstrated the ability to be effective against various cancer types. We arrive at our target price of $6 by applying a P/S [price-to-shares] multiple of 8x to the 2011 revenue of $32.35 million, discounted back at 25 percent for 3 years.
Read the full analyst report on CBLI
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