Feb 24, 2021
[4 min Read]
Checkpoint Therapeutics Inc. (CKPT) 24-02-2021
Why do I like the stock? My personal ideal entry-level would lie between 2,50 and 3,00 USD. From that level, it has already shown to have an upside potential of more than 100% with its 52-week high of $5,38. Moreover analyst rate that this stock at a median price target of more than $17. Moreover, Checkpoint has 5 drugs in its pipeline, with their most promising drug Cosibelimab expected to finish trials in the second half of 2021. The target market is valued at over $25 billion. Moreover, Checkpoint Therapeutics is debt-free and had enough cash-runway for the next 2.6 years.
What is Checkpoint's business (https://www.marketbeat.com/stocks/NASDAQ/CKPT/):
Checkpoint Therapeutics, Inc., an immuno-oncology biopharmaceutical company, focuses on the acquisition, development, and commercialization of novel treatments for patients with solid tumor cancers. The company's product candidates include CK-101 that in Phase I clinical trial for the treatment of epidermal growth factor receptor mutation-positive non-small cell lung cancer; and Cosibelimab, a programmed death ligand-1 (PD-L1), which is in Phase I clinical trial in patients with selected recurrent or metastatic cancers. It also develops CK-103, a small molecule inhibitor of BET bromodomains; and CK-302, a human agonistic antibody for oncology indications. Checkpoint Therapeutics, Inc. has collaboration agreements with TG Therapeutics, Inc. to develop and commercialize certain assets in connection with its licenses in the field of hematological malignancies. The company was founded in 2014 and is headquartered in New York, New York. Checkpoint Therapeutics, Inc. is a subsidiary of Fortress Biotech, Inc.
Checkpoint has been rated by 3 different wall street analyst at an average price target of $17.67 whilst currently trading at just over $3.00 (https://www.marketbeat.com/stocks/NASDAQ/CKPT/price-target/).
Currently, Checkpoint Therapeutics has 5 different drugs in its pipeline, which is a good sign since it means that if one drug fails there are still other horses to bet on.
The results PD-L1 will probably be significant for Checkpoint's share price, which are expected to be released in the second half of 2021 which is the estimated final data collection date for the primary outcome measure. The full completion date of the study is expected in December 2022 (https://clinicaltrials.gov/ct2/show/record/NCT03212404?term=cosibelimab&draw=2&rank=1).
The expected annualized sales of the PD-L1 market is over $25 billion and is expected to grow upwards of $50 billion (https://seekingalpha.com/article/4406366-checkpoint-therapeutics-maybe-enough-here-for-a-small-watch-item-starter-position).
Currently, there are other companies that provide treatments for PD-L1. However, Checkpoint plans to capture a meaningful market share with Cosibelimab at a 50% lower price (https://www.thepharmaletter.com/article/checkpoint-therapeutics-pushing-ahead-with-cosibelimab).
Insider buying (https://www.marketbeat.com/stocks/NASDAQ/CKPT/insider-trades/):
Insider buying has not occurred within the last 12 months. Insiders have sold for $350,000 worth of shares in Q1 2021. This has been done by the Checkpoints CEO, which often is not a good sign. In this particular case, it should not be too alarming though since it was only 3.6% of his entire holding. However, it would be a good idea to keep track if over the course of the first half-year of 2021 if more insiders will sell shares (https://www.nasdaq.com/articles/have-checkpoint-therapeutics-inc.-nasdaq%3Ackpt-insiders-been-selling-their-stock-2021-02-06).
Institutional Ownership (https://www.marketbeat.com/stocks/NASDAQ/CKPT/institutional-ownership/):
Current institutional ownership is 18.75%, which is not extremely high but it has caught some attention within the past 3 years. Those institutions which have invested have not disinvested over the past 3 years.
Checkpoint's balance sheet above (https://finance.yahoo.com/quote/CKPT/balance-sheet?p=CKPT) is healthy. Their current assets outweigh their current liabilities which indicates that it is very able to meet its short term obligations. In September 2020 the company had $42 million in cash and was debt-free its cash burn was $16 million. This indicates that the company has a cash runway for 2.6 years. Moreover, Checkpoint therapeutics was able to shrink last years cash burn by 33%. (https://simplywall.st/stocks/us/pharmaceuticals-biotech/nasdaq-ckpt/checkpoint-therapeutics/news/companies-like-checkpoint-therapeutics-nasdaqckpt-are-in-a-p).
If the company requires more money, taking out debt or issuing new shares could fund the company's further expenses. The cash run-way covers the expected finish of the Consibelimab (December 2020). By then, the possible FDA approval of this drug would result in revenue.
Checkpoint's revenue is almost non-existent, at a mere $1-2 million annually over the past 3 years.
Please let me know what you think. Any feedback or criticism is highly appreciated!