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Inside the Market's roundup of some of today's key analyst actions
BMO Nesbitt Burns analyst Do Kim raised his target price for stock Ionis Pharmaceuticals Inc. (IONS-Q) based on the expectation of a fast ramp for its Spinraza drug.
On Dec. 23, the U.S. Food and Drug Administration announced the approval of the drug for the treatment of spinal muscular atrophy (SMA) in pediatric and adult patients. Spinraza was developed by Ionis and licensed to Biogen Inc. (BIIB-Q), who is responsible for its future development, manufacturing, and commercialization.
"We assume Spinraza launches in 1Q17, with broad adoption across Type 1-3 SMA patients," said the analyst. "Upside to our 1Q17 sales estimates of $18-million could come from a bolus of patients waiting for drug. Our revised Spinraza estimates include a 75-85-per-cent gross-to-net, 6 doses for first year, 3 doses subsequent years, and 95-per-cent compliance rate. Partner Biogen announced a WAC price of $125,000, which translates to $750,000 for the first (loading doses) 12 months, followed by an annual maintenance cost of $375,000.
He added: "We view the risk/reward for the January 5th R&D update as skewed to the upside, given limited expectations for earlier pipeline drugs including DMPK-2.5, GCGR-Rx and FXI-Rx. Ionis will also have additional details on COMPASS data, including secondary and exploratory endpoints. While the 6-mo COMPASS study duration may be too short to observe clinically meaningful reductions in pancreatitis episodes, we believe it will be a key focus for the FCS pivotal study (1Q 2017). We believe COMPASS and Phase II FCS data point to a successful Phase III results given identical primary endpoints."
With an "outperform" rating for the stock, his target increased to $68 (U.S.) from $61. The analyst consensus price target is $46.20, according to Thomson Reuters.
"We believe Ionis' lead candidates could change the course of multiple rare diseases," he said. "We believe the near-term investor focus will be on Phase III data readouts for TTR-Rx (2Q17) and Volanesorsen (1Q17), which will clarify safety concerns and detail the products' competitiveness against competitor pipeline products."
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In other analyst actions:
Veresen Inc. (VSN-T) was upgraded to "outperform" from "neutral" by Macquarie analyst David Noseworthy. He raised his target price for the stock to $14.50 from $14. The analyst average price target is $13.79, according to Bloomberg.
Senior Housing Properties Trust (SNH-Q) was given a new "overweight" rating and $23 (U.S.) target by Cantor Fitzgerald analyst Joseph France. The average is $20.43.
Jefferies analyst Matthew Andrews downgraded Anthera Pharmaceuticals Inc. (ANTH-Q) to "hold" from "buy." He lowered his target to $1 (U.S.) from $1. The consensus average is $2.47.
SunTrust Robinson Humphrey analyst Edward Nash downgraded Anthera to "hold" from "buy" and also dropped his target to $1 (from $6).
Sidoti & Company LLC analyst Stephen O'Hara initiated coverage of Patrick Industries Inc. (PATK-Q) with a "buy" rating and $100 (U.S.) target. The average is $83.
Northland Securities Inc analyst Robert Breza initiated coverage of Intrexon Corp. (XON-N) with an "outperform" rating. His target is $40 (U.S.). The average is $44.14.
MORE TO COME
David Leeder