BOSTON ( TheStreet) -- An email from John R. kicks off this week's Biotech Stock Mailbag:
"Hi Adam, what do you think of Leerink Swann's recent upgrade of Cyclacel Pharmaceuticals (CYCC) to outperform with a $3 price target last month? Stock closed today at another new 52-week low (70 cents after hours.) Do you think it's even worth a look when it hits cash levels, or around $0.55? Or should this one should just be in the dumper? I have some free capital and was looking at possibly pulling the trigger."
It's entirely appropriate to tie together Leerink's July 12 initiation of research coverage of Cyclacel with an outperform rating and a $3 price target with the same bank's role in leading a financing of Cyclacel on July 1 that raised $9.3 million, net of fees and expenses.
I'm told that some of Cyclacel's existing institutional shareholders weren't happy with the latest financing and didn't participate as a result. The Leerink deal might have been easy money but it raised too little and did nothing to improve the quality or stability of the company's shareholder base. In fact, the Leerink financing probably did the opposite, which has contributed to the stock's accelerated decline in value this summer.
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