Cyclacel Pharmaceuticals: A Little Left on the Upside

Shares of Cycalcel Pharmaceuticals (NASDAQ:CYCC) traded up more than 11% last Friday on 9.7X its average daily volume, a day after the company's Q1 2011 earnings report revealed that its net loss per share was nearly halved while revenue was up more than 41% from the same time-period last year.

CYCC 1 Month Chart
CYCC 1 Month Chart

The stock is up 38% over the last month and may continue its current run into the fast approaching American Society of Clinical Oncology (ASCO) annual meeting, where the company will be presenting pilot study data on one of its oncology product candidates, Sapacitabine, which is an oral nucleoside analog prodrug that has demonstrated impressive anti-tumor activities during multiple preclinical studies.

CEO Spiro Rombotis from a 05/12/11 press release:

We are looking forward to the upcoming presentation at a major medical conference of pilot study data of sapacitabine in combination with decitabine in patients with AML. In addition, we expect to report later this year additional sapacitabine data in hematological malignancies and non-small lung cancer, or NSCLC, and seliciclib biopsy analysis data in NSCLC.

Additionally, the company provided three major business highlights:

Opened enrollment of the SEAMLESS pivotal Phase 3 study for sapacitabine oral capsules as a front-line treatment of elderly patients aged 70 years or older with newly diagnosed AML who are not candidates for intensive induction chemotherapy.

SEAMLESS is being conducted under a Special Protocol Assessment (NYSE:SPA) agreement that Cyclacel reached with the U.S. Food and Drug Administration (FDA). The trial builds on promising 1-year survival observed in elderly patients aged 70 years or older with newly diagnosed AML or AML in first relapse enrolled in a Phase 2 study of single agent sapacitabine.

Announced publication of preclinical data in the Proceedings of the National Academy of Sciences, demonstrating that cyclin E plays a major role in making Human Epidermal growth factor Receptor 2 positive (HER2+) breast cancer resistant to trastuzumab (Herceptin), a widely used medicine for breast cancer patients who test positive for HER2. The publication provides a rationale for exploring Cyclacel’s orally available CDK inhibitors in this population of patients with breast cancer.

Presented preclinical results for two Cyclacel clinical compounds, sapacitabine and CY116, at the 102ND Annual Meeting of the American Association of Cancer Research in Orlando, Florida.

Many traders have speculated that the upcoming presentation will provide for a quick pop in share price and have recently positioned themselves accordingly. It is possible that any ASCO-related boost Cyclacel's stock may receive will be short lived. As such, I will be prepared to lighten my position following a post-ASCO upward move in the event technicals do not show signs of serious follow-through ability.

Disclosure: I am long CYCC.