Curis, Inc.

CRIS Details

Curis, Inc. (NASDAQ: CRIS) operates as a biotechnology company engaged in developing cancer treatments. Its primary product is Everidge, used for treating advanced basal cell carcinoma, which it commercializes via collaboration with Genentech and Roche. Other CRIS therapeutics under development include CI-8993, a monoclonal anti-VISTA antibody, and certain oral small molecule antagonists of immune checkpoints such as CA-170 (VISTA/PDL1 antagonist), CA-327 (TIM3/PDL1 antagonist), and CA-4948 (IRAK4 kinase inhibitor).

Product Pipeline (Source: Company Presentation, November 2021)

Latest News:

• CI-8993 Preclinical Data: On November 09, 2021, CRIS released the preclinical data for experimental drug CI-8993, an entirely human IgG1K monoclonal antibody that binds to this immune checkpoint molecule. In an abstract test conducted to determine the pharmacokinetics and biodistribution of CI-8993 in patients, a Zirconium-89 (89Zr)-labelled CI-8993 was developed for PET imaging, which validated 89Zr-Df-CI-8993 for specific binding to huVISTA in-vivo.
• First Patient Dosing in CA-4948 Study: On November 08, 2021, the company stated that it has commenced dosing in the combination therapy under Phase 1/2 clinical trial for CA-4948 for treating acute myeloid leukemia (AML) or high-risk myelodysplastic syndromes (MDS).

Q3FY21 Results:

• Surge in Revenues: The company reported a 10.83% increase in total revenues to USD 3.04 million in Q3FY21 (ended September 30, 2021) compared to USD 2.74 million in Q3FY20 primarily due to higher royalty revenues generated from Erivedge sales by Genentech and Roche.
• Net Loss: Its Q3FY21 Net loss increased to USD 11.05 million from USD 5.97 million reported in Q3FY20, owing to a significant increase in research and development (R&D) and general and administrative expenses.
• Balance Sheet: CRIS exited the quarter with a cash balance (including short-term investments) of USD 128.90 million and no outstanding debt.

Key Risks:

• Stiff Competition: For Erivedge, CRIS confronts stiff competition from Sun Pharmaceutical Industries Ltd.'s sonidegib (Odomzo). If the rivalry heats up much further, it could hurt the company's royalty revenues and overall performance.
• Commercialization Risk: The outcomes of preclinical studies and early-stage clinical trials, which require a significant amount of resources, may not be positive. Hence, if the company fails to commercialize its products or need additional capital or time, its financials may be impacted.

Outlook:

• Expected Milestones: In its Q3FY21 release, CRIS stated that in January 2022, it plans to report on the initial safety data from the CI-8993 Phase 1 monotherapy study for treating R/R solid tumors and the latest safety data from the Phase 1/2 study of CA-4948 in treating AML/MDS patients with spliceosome mutations.
• H1FY22 Clinical Data Releases: In H1FY22, the company will release supplementary data on the CA-4948 Phase 1/2 monotherapy study for individuals with R/R AML/MDS and initial data from the Phase 1/2 study of CA-4948 combined with ibrutinib in people suffering from B cell cancers.

Valuation Methodology: EV/Sales Multiple Based Relative Valuation

(Analysis by Kalkine Group)

• % Premium/(Discount) is based on our assessment of the company's NTM trading multiple after considering its key growth drivers, economic moat, stock's historical trading multiples versus peer average/median, and investment risks.

CRIS Daily Technical Chart (Source: REFINITIV)

Stock Recommendation:

CRIS's stock price decreased 63.86% in the past six months and is currently leaning towards the lower band of its 52-week range of USD 1.09 to USD 17.40. The stock is currently trading below its 50 and 200 DMA levels, and its RSI Index is at 29.79. We have valued the stock using the EV/Sales-based relative valuation methodology and arrived at a target price of USD 7.61.

Considering the significant correction in the stock price, robust product portfolio, decent growth potential, and associated risks, we recommend a "Speculative Buy" rating on the stock at the current price of USD 5.88, up 2.80% as of November 10, 2021, 1:44 PM ET.

* The reference data in this report has been partly sourced from REFINITIV.

* All forecasted figures and industry information have been taken from REFINITIV.

*Depending upon the risk tolerance, investors may consider unwinding their positions in a respective stock once the estimated target price is reached.

Ultralife Corporation

ULBI Details

Ultralife Corporation (NASDAQ: ULBI) is a global provider of products and services to the government, defense, and commercial sectors, ranging from power solutions to communications and electronics systems. It designs and manufactures rechargeable and non-rechargeable batteries, charging systems, electronic systems and accessories, and custom-manufactured systems such as RF amplifiers, power supply, cable and connector assemblies, amplified speakers, and so on. As of November 10, 2021, the company's market capitalization stood at USD 94.07 million.

Latest News:

• Key Commercial Contract: On October 26, 2021, ULBI received a USD 4.2 million purchase order to supply Vehicle Amplifier-Adaptors (VAA) to Thales Defense & Security, Inc., engaged in the design and development of software-defined radio equipment for the US Army's Leader Radio Program. ULBI plans to begin shipment in FY22.

Q3FY21 Results:

• Decline in Topline: The company reported a decrease of 10.68% in total revenue to USD 21.76 million in Q3FY21 (ended September 30, 2021) compared to USD 24.36 million in Q3FY20.
• Reported Net Loss: ULBI reported a net loss of USD 0.59 million in Q3FY21 vs. a net income of USD 0.41 million in Q3FY20.
• Cash and Debt Position: As of September 30, 2021, the company's cash balance stood at USD 15.77 million, with a total debt of USD 0.25 million.

Financial Metrics (Source: Investor Presentation, October 28, 2021)

Key Risks:

• Customer Concentration Risk: The majority of ULBI's revenue comes from a small number of customers. For example, in FY20, its top two customers L3Harris Technologies and Thales Defense & Security, Inc., represented 17% and 6%, respectively, of the total revenue. As a result, the loss of any of these key customers could harm its financial performance.
• Dependence on the US and Foreign Military: In FY20, sales to the US and foreign militaries or associated agencies accounted for 42% of ULBI revenue. As a result, any unfavorable budget and appropriation decisions made by governments could have a negative impact on the company's bottom line.

Valuation Methodology: EV/EBITDA Multiple Based Relative Valuation

(Analysis by Kalkine Group)

• % Premium/(Discount) is based on our assessment of the company's NTM trading multiple after considering its key growth drivers, economic moat, stock's historical trading multiples versus peer average/median, and investment risks.

ULBI Daily Technical Chart (Source: REFINITIV)

Stock Recommendation:

ULBI's stock price has declined 31.50% in the past three months and is currently leaning towards the lower band of its 52-week range of USD 5.54 to USD 11.78. The stock is currently trading below its 50 and 200 DMA levels, and its RSI Index is at 19.63. We have valued the stock using the EV/EBITDA-based relative valuation methodology and arrived at a target price of USD 6.96.

Considering the significant correction in the stock price, strong balance sheet, current valuation, and associated risks, we recommend a "Speculative Buy" rating on the stock at the closing price of USD 5.72, down 2.22% as of November 10, 2021.

* The reference data in this report has been partly sourced from REFINITIV.

* All forecasted figures and industry information have been taken from REFINITIV.

* Depending upon the risk tolerance, investors may consider unwinding their positions in a respective stock once the estimated target price is reached.