BioLine Rebounds as Trial Lifts Outlook: Israel OvernightLeslie Picker
BioLineRX Ltd. is rebounding from a record low after the Israeli drugmaker’s leukemia treatment was approved for a second round of testing in the U.S., bolstering a company that hasn’t turned a profit since 2010.
Shares of BioLineRX jumped 5.1 percent in New York yesterday, the most in two months, to $1.86. Trading volumes were more than six times the daily average over the past three months. The Bloomberg Israel-US Equity Index of the biggest Israeli companies in the U.S. rose the most since March 20, led by Cellcom Israel Ltd., after Excellence Nessuah Brokerage Ltd. upgraded the stock to buy.
BioLineRX won U.S. approval to begin a second round of testing on its BL-8040 treatment for acute myeloid leukemia, according to a statement issued yesterday. The Jerusalem-based company’s shares plunged 53 percent March 20 as BioLineRX said that it was ending development of an experimental schizophrenia drug after it failed to help patients in a mid-stage trial. The stock touched a record-low $1.59 April 4.
“No one is giving the company any credit for its pipeline whatsoever after its first and most important drug failed,” Raghuram Selvaraju, an analyst at Aegis Capital Corp. who has rated BioLineRX buy since October, said by phone yesterday. “I tell investors who got burned not to dump their stock. At these levels, there’s very little downside risk and a lot of potential upside.”
BioLineRX, which has a market capitalization of $41.4 million, is trading at about a third of its record high of $5.59 reached in July 2011. The company has posted losses for the past nine quarters and last recorded net income of 77.34 million shekels ($21.24 million) for the three months to Sept. 30, 2010, data compiled by Bloomberg show.
The study will evaluate the ability of BL-8040 to mobilize cancer cells from the bone marrow to the peripheral blood and induce their death, BioLineRX said in the statement. Acute myeloid leukemia is a cancer of the blood and bone marrow, according to the National Cancer Institute.
BiolineRX’s enterprise value may double if the BL-8040 leukemia treatment succeeds, according to Aegis’ Selvaraju. The metric, which is the sum of market capitalization, preferred equity, and short- and long-term interest-bearing debt, less cash and equivalents, was at of $23.1 million yesterday, according to data compiled by Bloomberg.
BioLineRX declined 26 percent this year as its experimental treatment for schizophrenia, BL-1020, didn’t meet a trial’s main goal of improving cognitive function compared with risperidone, a generic drug, the company said in a statement on March 20.
Shares of BioLineRX in Tel Aviv dropped 7 percent to 68 agorot, or 19 U.S. cents today. One ADR represents 10 underlying shares. The Bloomberg Israel-US Index added 1 percent to 90.18 to a two-week high yesterday. Israel’s benchmark TA-25 Index slid 0.2 percent to 1,230.12 today.
Cellcom surged 6.2 percent to $9.49 after Excellence Nessuah boosted its rating to a buy from hold and increased its price estimate by 36 percent to 38 shekels, or $10.43. Shares in Tel Aviv this morning gained 2.4 percent to 34.36 shekels, or $9.48.
Analyst Gilad Alper also raised his rating on Partner Communications Co. to hold from the equivalent of sell. Shares rose 2.9 percent to $6.98 in the U.S. The Israeli shares fell 0.4 percent in Tel Aviv to 25.23 shekels, or $6.96.
Allot Communications Ltd. slipped the most among the companies in the benchmark Israel-US Index. Shares of Allot, which makes technology used by telecommunications providers to track wireless traffic, fell 2 percent to $11.56 in New York. It lost 2.8 percent to 41.78 shekels, or $11.52, today in Tel Aviv.