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CASI: Making headway towards commercialization

05/20/2019
By Beth Senko, CFA

NASDAQ:CASI

READ THE FULL CASI RESEARCH REPORT

CASI Pharmaceuticals, Inc. (NASDAQ:CASI) is establishing its footprint as a leading provider of high-quality proprietary, licensed and ANDA pharmaceuticals to the rapidly evolving Chinese market. We believe that CASI is unique in its understanding of how to pursue opportunities in China while minimizing the pitfalls that often plague US-listed China-focused companies. CASI’s management sees China as a sustainable opportunity and is investing with this in mind. With a robust, diverse pipeline, commitment to investing in new opportunities and ample cash, we believe that CASI Pharmaceuticals will firmly establish itself over the next several years as a leading player in China. Longer-term the Company aspires to expand sales outside of China and neighboring countries to the US and other markets.

CASI Pharmaceutical reported Q119 results on May 15. Results showed continued investment towards launching its recently approved in-licensed drug, Evomela in China, progress towards gaining regulatory approvals for Marqibo and Zevalin and expansion of its robust product portfolio with its investment in CID-103 (also known as TSK011010), an anti-CD38 monoclonal antibody, which expands the Company’s hematology product pipeline.
Research and development for Q119 rose $0.9 million (+52%) to $2.6 million compared $1.7 million in the year-earlier period, reflecting costs associated with regulatory, consulting and manufacturing related services, additional personnel and facilities costs. General and administrative spending climbed to $5.7 million in the quarter, including $1.6 million in stock compensation paid to senior management. The balance of the increase stemmed from higher personnel costs in preparation for the marketing launch of Evomela and professional service fees.

In total, CASI reported a net loss of ($0.09) per share, or ($8.2 million) compared with a loss of ($0.05) per share or ($3.6 million) in the first quarter of 2018.

We are adjusting our estimates to reflect higher spending for research and development in 2019 from $2.6 million to $7.8 million, but holding our G&A expense steady at $23.7 million. This change reduces our 2019 EPS estimate from ($0.24) to ($0.29). We are also raising our R&D spending expectations for 2020-2022, reducing our EPS estimates by c. $0.03-0.04 each year.

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