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Elle Investments Research Report: BYSI

Company: BeyondSpring

Symbol: BYSI

Analysis Date: 10/25/19

Analysis Price: $12.28

Price Target (PT): $25.00

Upside: 104%

Dividend: NA

Recommendation: Buy

BYSI: 1-Year Chart

Source: Seeking Alpha


The recent capital raise that sent BYSI's stock down over 20% offers a great entry point for new investors. NDAs for lead candidate Plinabulin in both the US and China are set to be submitted during 2020, meaning that commercialization is right around the corner. An improved safety profile demonstrated thus far indicate that Plinabulin should be able to differentiate itself in a crowded CIN field. Additionally, its anti-cancer properties could potentially position it to be a part of not just NSCLC combo therapies, but across various tumor types. We think BYSI is a Buy.


As of 2Q19 (ended June 30 and announced on September 18), BYSI had a cash balance of $1M. During June and July, BYSI received about $10M from the sale of certain equity interests in their partially-owned Chinese subsidiary Dalian Wanchunbulin Pharmaceuticals.

On July 17 they completed an offering, selling approximately 2.1M shares @ $17.00/share for gross proceeds of $35M. (Note: The closing price on July 16 was $19.11/share, representing a discount of 11%).

On October 25 they announced the terms of another offering, pricing approximately 1.9M shares @ $13.50/share for gross proceeds of $25M. With the stock closing on October 24 at a price of $16.77/share, this represents a discount of almost 20%, which explains the big move downward.

These transactions together bring their cash balance to about $71M. However, with 3Q19 having just ended, their cash balance is likely down to $64M as of September 30. Considering that the quarterly cash burn is about $7M, they have a solid cash runway of at least 9 quarters.



Value: $436M

Neutropenia is the condition that is characterized by having fewer than normal white blood cells. As well as killing off bad cancer cells, the radiation from chemotherapy unfortunately also harms disease-fighting white bloods cells, which leaves patients more susceptible to infection.

Amgen's (AMGN) Neulasta is a drug that is a man-made form of a naturally produced substance called G-CSF. G-CSF drugs work by stimulating the growth of a type of white blood cell called neutrophils, which play a very important role in fighting infection. Neulasta, which was launched in 2002, has been very successful at boosting white blood cell counts in chemo patients. In 2014 it generated worldwide net sales of $4.6B.

In 2018 the CIN market became more crowded due to the launch of several biosimilars that were hoping to underprice Neulasta and take market share. However, Plinabulin is hoping to differentiate itself from this crowded field. While Neulasta and the biosimilars are very efficacious, they do come with a harmful side effect: Neulasta causes bone pain in about 60% of patients, and severe bone pain in about 25% of patients. Plinabulin, on the other hand, does not cause any bone pain after day 3 of use as a monotherapy. And when used in combination with Neulasta, it has proven to be able to lessen the bone pain compared with Neulasta as a monotherapy. We feel that being able to match the efficacy of Neulasta as well as offer an improved tolerability profile is a compelling value proposition.

Additionally, Plinabulin has demonstrated anti-cancer properties (in contrast to Neulasta). It's currently being tested as a combo therapy with docetaxel in a phase 3 trial for NSCLC (2nd and 3rd line). However, this indication is only a small part of the global oncology market. The hope is that Plinabulin's anti-cancer properties can open the door to potentially being used in combination with other cancer-fighting agents across many different tumor types.

Over the next 12 months, BYSI will have several catalysts that can propel the stock higher. By the end of 1Q20, lead candidate Plinabulin will have three phase 3 data readouts. They then plan on submitting the NDA for Plinabulin in China for NSCLC and CIN at some point during 1Q20. The NDA in the US (also for NSCLC and CIN) will be submitted sometime during 2020.

Remaining pipeline assets

Value: none assigned

The remaining pipeline assets are in the preclinical phase. We have not assigned them any value.


The drop from the recent capital raise offers a great entry point, as BYSI is now well-capitalized to see itself through the next two years, give or take. Lead candidate Plinabulin has thus far demonstrated equivalent efficacy to multi-blockbuster Neulasta in the CIN space. While cheaper biosimilars have crowded the market, Plinabulin's improved safety profile leads us to believe that it has a good chance of differentiating itself from the competition. We think BYSI is a Buy.


CIN: chemotherapy-induced neutropenia

G-CSF: granulocyte colony-stimulating factor

NDA: new drug application

NSCLC: non-small cell lung cancer

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Published By: Elle Investments Research Team

Phone: (914) 715-8066

Email: info@elle-investments.com

Disclaimer: The Elle Investments portfolio is managed utilizing a "quantamental" approach where each position, while based on Fundamental Analysis, is sized as part of a larger quantitative portfolio. The commentary presented here is for research purposes only and is not to be taken as investment advice. Readers are expected to perform their own due diligence and/or hire an investment professional prior to entering/exiting positions. Published research ideas are related to the specific market price and publicly available information at the time of research submission/publication. Elle Investments will enter/exit positions without notice.