Anacor Pharmaceuticals Inc (NASDAQ:ANAC) shares jumped nearly 56% today after the company announced preliminary positive top-line results from its two Phase 3 pivotal studies of Crisaborole Topical Ointment, a novel non-steroidal topical anti-inflammatory phosphodiesterase-4 (PDE-4) inhibitor in development for the potential treatment of mild-to-moderate atopic dermatitis in children and adults.
In response, Wedbush analyst David Nierengarten raised his price target for Anacor stock to $190 (from $85), while reiterating an Outperform rating on the stock. The new price target implies an upside of 44% from current levels.
Nierengarten wrote, “Given the strong results seen in the pivotal trials, consistent with that observed in the Ph 2 trials, we believe crisaborole will have a relatively straightforward approval process. We believe ANAC is in position to file an NDA by 1H16 and launch in 1H17. With an estimated $190M in cash and equivalents on hand, we believe ANAC has the financial resources to commercialize crisaborole on its own, and estimate ~$350M in sales in 2017, rising to ~$2B in 2020, our valuation year.”
The analyst continued, “We note that our sales ramp is similar to that observed early in the launch of Protopic and Elidel, the last non-steroidal topical therapies approved for AD. Our sales estimates are based on a $1,500 per patient per year price for crisaborole, conservatively in-line to a small premium to the annualized per patient revenue for Elidel, which is specifically approved for the mild-to-moderate AD population. Crisaborole is covered by a composition of matter patent that expires in 2026 and method of use patents that first expire in 2027.”
According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst David Nierengarten has a total average return of 57.1% and a 59.0% success rate. Nierengarten has a 187.7% average return when recommending ANAC, and is ranked #9 out of 3694 analysts.