ChemoCentryx Stock: Investment Case Review (NASDAQ: CCXI)

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We are what we pretend to be, so we have to be careful about what we pretend to be. ”- Kurt Vonnegut

Today we will look at a more in-depth name that appears from time to time in comments from Seeking Alpha followers. We last published article of that name with a small capitalization in December, after recently receiving key FDA approval. We follow how the company is progressing in the analysis below.

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Company overview:

ChemoCentryx, Inc. (NASDAQ: 211) is focused on the development and commercialization of new drugs for inflammatory diseases, autoimmune diseases and cancer. The company is based just outside of San Francisco. The capital is currently trading at about $ 25.50 per share and has an approximate market capitalization of $ 1.8 billion.

Vision of the company

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When we last looked at this company, it was only two months after we saw that the FDA approved the main candidate for TAVNEOS as adjunctive therapy to adult patients with severe active antineutrophil cytoplasmic autoantibody-associated vasculitis (ANCA vasculitis) in combination with standard therapy.

This was a big profit for the company, although the drug is aimed at a small subset of the vasculitis population. The drug is marketed in the United States, where it has all the rights. TAVNEOS was also launched in Germany and Austria by partner Vifor Pharma, which has rights outside the United States. ChemoCentryx receives rewards from mid-teens to mid-twenties for all sales outside the country. TAVNEOS has also received approval in the United Kingdom and Canada.

Pipeline

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TAVNEOS is also being developed for other afflictions. The company has other compounds at an earlier stage of development, but they will not be relevant to this analysis.

This compound targets lupus nephritis or LN. LN is renal inflammation caused by systemic lupus erythematosus (SLE or lupus).

TAVNEOS For LN

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ChemoCentryx expects to receive feedback from the FDA soon on the clinical development plan for this indication, which it plans to begin in the second half of 2022.

TAVNEOS is also being developed for the treatment of severe suppurative hydradenitis (HS). It is a chronic skin condition that causes painful, boil-like lumps that form under the skin and often produce pus and blood.

TAVNEOS for HS

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The company plans to meet with the FDA to discuss phase III development of TAVNEOS in patients with Hurley’s stage III (severe) HS at the end of the second trimester. The leadership aims to begin a Phase III clinical trial in these patients in the second half of this year.

Finally, TAVNEOS targets C3 glomerulopathy or C3G. There are no FDA-approved therapies for C3G, a group of related conditions that cause kidney failure. Management expects to meet with the FDA in the second half of this year to discuss TAVNEOS ‘Phase II clinical trial set of ACCOLADE clinical trials for the treatment of C3G.

First quarter results:

On May 5, the company published the first quarter numbers. ChemoCentryx reported a GAAP loss of 55 cents per share on revenue of just under $ 5.5 million. The numbers on both the top and bottom lines significantly exceeded expectations. Net product sales in the United States rose more than 500 percent from the fourth quarter to $ 5.4 million. Revenue from cooperation and licenses accounted for the rest of sales.

The $ 45 million regulatory payment that ChemoCentryx received for TAVNEOS approval in Europe in the first quarter of 2022 will be recognized for approximately four years. The moment of recognition is probably the main factor behind the first quarter of the company.title‘Miss. Royalties from sales in Europe should start to arrive and be reported in the income statement for the second quarter.

Analyst comment and balance:

Over the past six weeks, four analysts, including Raymond James and Steeff Nikolaus, have reissued stock ratings. Prices on offer range from $ 64 to $ 106 per share. On May 10 JPMorgan supported their Hold rating on the stock, but raised its target price from $ 30 to $ 34 per share.

Just over eight percent of the unpaid voyage in this capital is currently short-lived. So far in 2022, insiders have sold shares worth just under $ 100,000. This year, there have been no domestic purchases of the shares. The company ended the first quarter with just over $ 370 million in cash and marketable securities on its balance sheet against insignificant long-term debt, after reporting a net loss of $ 38.6 million in the first quarter.

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Current analysis consensus ChemoCentryx reports a net loss of just under $ 2 per share as revenue doubles to nearly $ 70 million in 2022. Further improvement is projected in 2023, with revenue rising north of $ 190 million and net loss will be reduced to about 75 cents per share.

Key targets for 2022

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The company seems to have performed well in the development and implementation of TAVNEOS. The balance seems to be in a stable shape and the quarterly burning of money should start to decrease as TAVNEOS wins sales. Initial implementation always seems to have some difficulties, especially for small-cap companies in this pandemic era. Analyst firms are modeling impressive revenue growth for this company.

We have completed our first article on ChemoCentryx, saying it deserves little. “see item‘position. This continues as the company pushes the development of TAVNEOS forward. Own capital options are available and they are both liquid and profitable. Therefore, I will continue to take my small position in this name through covered call holdings.

We enjoy the beauty of the butterfly, but we rarely acknowledge the changes it has gone through to achieve that beauty.. ”- Maya Angelou

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