In a research report released today, Canaccord analyst John Newman reiterated a Buy rating on shares of Palatin Technologies, Inc. (NYSEMKT:PTN) with a $6 price target, following the news that competitor Sprout is being bought by Valeant Pharmaceuticals Intl Inc (NYSE:VRX) for $1 billion. Sprout recently secured FDA approval for Addyi, the first drug for female sexual disorder.
Newman noted, “Valeant’s $1B offer to buy Sprout validates the commercial potential of the female sexual dysfunction drug class, in our view, and suggests significant value for PTN’s bremelanotide. Importantly, PTN’s market cap is currently only $60M, and we estimate $828M US peak sales for bremelanotide in female sexual dysfunction. Needless to say, we view the stock as grossly undervalued, especially given FDA clarity on the approval pathway for this drug class and VRX’s $1B offer for Sprout.”
The analyst continued, “Bremelanotide is not likely to receive a REMS for risk of interaction with alcohol, and Phase 2 data suggest better efficacy versus Sprout’s Addyi, both significant positives in our view. Also, bremelanotide is administered as an on-demand injection, which we believe minimizes safety risks vs. Addyi, which must be taken every day.”
According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst John Newman has a total average return of 7.4% and a 46.4% success rate. Newman has a 2.6% average return when recommending PTN, and is ranked #620 out of 3741 analysts.