Post-IPO Strength Seen In Stemline Therapeutics

Investor demand for shares of Stemline Therapeutics (STML) seems to be picking up tremendously, as the stock rallied 13.3% higher yesterday to reach a new high of $16.49 per share in yesterday’s trading (May 1st, 2013). This represents a 65% premium over its IPO price of $10.00 per share, and shows that there has been significant investment interest from the market since January 2013. Through the public offering, Stemline collected $38.15 M in proceeds. Based on the statements of CEO Dr. Ivan Bergstein, this should provide the company with the funds needed to meet the next key milestones for their SL-401 and SL-701 development programs.

Stemline Therapeutics’ anti-cancer programs offer a unique play on the cell therapy and oncology sector with proprietary technology that targets solid tumors, and cancer stem cells (CDCs). The CSCs are a particularly important for the next generation of cancer therapeutics due to their central role in tumor relapses.

SL-701 is a cancer vaccine that is being developed as a treatment of advanced pediatric and adult brain cancer (glioma), and is close to advancing into Phase IIb trial for both the pediatric and adult indications soon. This therapy is specifically designed to induce an immune system response against particular factors expressed by CSCs and the tumors found in glioma. Since treatment options are very limited for the more aggressive types of brain cancer, SL-701 could ultimately become a very successful product for a niche market.

SL-401 is a biologic that directly attacks cancer, and is directed towards a particular receptor known as IL-3R (interleukin-3 receptor) that is overexpressed on cancer stem cells as well as more matured cancer cells in certain types of hematologic (blood) cancers. Capitalizing on the SL-401’s affinity for particular blood cancers, Stemline is looking to pursue clinical development these indications (and possibly more): Blastic Plasmacytoid Dendritic Cell Neoplasm (BPDCN), Acute Myeloid Leukemia (AML), Myelodysplastic Syndrome (MDS), and Chronic Myeloid Leukemia (CML)

Of these indications, BPDCN could be of particularly interest in the next few years since this type of blood cancer only affects 2,000 patients each year and result in accelerated approval for SL-401.

As mentioned on the April 25th press release, the company enrolled in excess of the 300 patients that were originally intended for the study and that treatment was issued to the first 15 patients. These patients will be monitored for a 12 week post-treatment period, which would pave the way for a data release (likely in Q3 2013) and initiation of the final pivotal trial before the end of the year or in Q1 2014. This would result in data in the second half of 2014, along with an NDA submission.

The Takeaway

Overall, STML looks like another interesting mid-stage play on cancer therapeutics. The company’s focus on cancer stem cell targeting with SL-701 and SL-401 makes sense in the context of cancer treatment as a whole. Safety and tolerability of the two therapeutics has also been generally established in early-stage trials, and each of the two therapies have established a niche indication that could significantly improve patient outcomes while generating significant revenue for Stemline shareholders.