Chimeric Therapeutics Ltd (ASX:CHM) is fairly priced at $0.71 per share based on recent developments, including its agreement with Case Western University and following the release of its full-year financial results, Diamond Equity Research wrote in its latest update on the company.
This valuation is nearly nine times the current share price of $0.08.
The clinical-stage cell therapy company’s oncology pipeline was in its early phases of trials, the New York-based research firm said but noted that the company had built an innovative cell therapy pipeline and strengthened its position as Australia’s leading cell therapy player.
Chimeric Therapeutics has a licence agreement with the City of Hope for its CLTX CAR-T technology and has also been granted worldwide exclusive rights to the novel third-generation CDH17 CAR-T Cell Therapy from the University of Pennsylvania.
The following is an extract from the research note:
Financial year ended 2022 results update - Chimeric Therapeutics reported results for the financial year ending June 2022. Research and Development (R&D) expenses for the year were A$6.12 million (up 62% from A$3.78 million for the same period last year). The increase in R&D expenditure is attributable to the advancement in the company’s CDH17 and CAR-T technology. Other expenses, including general and administrative expenses, were reported at A$7.9 million (down 11.8% from A$8.97 million for the last financial year), which are in line with our expectations. The company ended the financial year with an operating cash burn of A$13.15 million (compared to A$8.83 million during the last financial year), attributable majorly to research and development and staff costs. Net loss for the financial year 2022 stood at A$15.9 million (compared with a A$15.13 million net loss for the last financial year), which is again in line with our estimates.
Sponsored research agreement with Case Western University - In November 2022, Chimeric Therapeutics announced that it has entered into a sponsored research agreement (SRA) with Case Western Reserve University (CWRU) to further advance Chimeric’s NK cell therapy portfolio. The research program at CWRU will be led by Dr David Wald, inventor of the CORE NK technology. Through this research collaboration, Dr Wald and his laboratory will work closely with Chimeric to advance multiple next-generation NK cell products through preclinical development, including CHM 0301 (Next-Generation CORE-NK Platform), CHM 1301 (Chlorotoxin CAR NK), CHM 2301 (CDH17 CAR NK), and CHM 3301 (undisclosed CAR NK). Chimeric also entered into an exclusive license agreement with CWRU, where Chimeric gains exclusive global rights to the CORE-NK platform for oncology, immune disorders, and viral infectious diseases, where Chimeric and CWRU are currently advancing multiple product candidates.
Dr Stephanie H Astrow appointed as vice president, Translational Sciences - Dr Astrow joins Chimeric with more than 20 years of experience working in cell therapy and biotechnology. Previously, she was associated with Kite Pharma and Fate Therapeutics (NASDAQ:FATE), where she led the translational development programs for CAR T, TCR, and NK cell therapies, overseeing teams focused on the mechanistic understanding of engineered cell therapy products. Dr Astrow holds a Bachelor of Arts in Biology and Medicine from Brown University, earned her PhD in Molecular and Cell Biology from the University of California, Berkeley, and holds an MBA from Pepperdine University.
Q1 FY23 cash flow and valuation update - The operating cash burn for the first quarter of the financial year 2023 came in at A$8.34 million, 93% of which was incurred for direct research and development (R&D) expenditure and staff costs. The company reported cash and cash equivalents at A$7.96 million for the quarter ended September 2022. We have updated our valuation model to reflect the latest financial, updated cash balance, and shares outstanding. Additionally, we updated our operating expense estimates, which we believe better reflect the company’s progress in its clinical pipeline candidates.