Biotech earnings reports often give just as much insight into future plans as they do on past successes. Analysts from FBR & Co. are bullish on Novavax, Inc. (NASDAQ:NVAX) and Juno Therapeutics Inc (NASDAQ:JUNO) following earnings thanks to what each company has in store for 2016. Let’s take a closer look.
Vernon Bernardino of FBR & Co. weighed in on the biotech company following earnings and commented on the company’s spending and pipeline. The company posted a net loss of $79 million compared to the analyst’s estimate of a loss of $34 million. Aside from earnings, the analyst points to the RSV vaccine studies and spending trends.
Novavax’s RSV vaccine for the flu is in Phase III testing for elderly adults. Bernardino points to the “evolving position” of the Advisory Committee on Immunizations to the CDC, which “bolsters [his] confidence that NVAX’s RSV vaccine can realize its full market potential.” He continues, “In particular, we think that ACIP’s increasingly positive views on maternal immunization have the potential to make seasonal vaccination with NVAX’s RSV vaccine a recommended standard.”
On the earnings front, the analyst notes that “spending is high, but not out of control.” Bernardino warns that spending levels will remain high through the year, but this is not a source of worry due to RSV vaccine’s strong momentum. The analyst continues, “Cash position potentially helps strengthen NVAX’s bargaining position in partnership discussions.” Although he explains that a partnership for Novavax would mitigate the “development and commercialization risk,” the company’s strong cash position allows it to fully fund its RSV development plans.
All in all, Bernardino believes the company’s pending RSV data will be a positive catalyst, making the current share price a compelling entry point. The analyst reiterates an Outperform rating on the stock with a $17 price target.
According to TipRanks, both analysts who have rated the stock in the last 2 months are bullish with an average 12-month price target of $14.50, marking over a 220% potential upside from current levels.
Juno Therapeutics Inc
Analyst Edward White at FBR & Co. weighed in on Juno Therapeutics following its 4Q15 report with “mostly in-line” performance and high expectation for the future. The Seattle-based biotechnology company seeks to “revolutionize medicine by re-engaging the body’s immune system to treat cancer.” The company’s report shares successes in its pipeline and optimistic expectations for 2016.
White reiterated an Outperform rating and a price target of $73. Juno reported quarterly revenue of $4.2 million and a non-GAAP loss per share of ($0.53). These figures were above White’s revenue estimates of $3.7 million revenue and slightly lower than his ($0.52) EPS projections.
Given the circumstances shared in the quarterly report, the analyst lowered non-GAAP 1Q16 EPS estimates to ($0.66) from ($0.55). Additionally, White shared that for FY16, he is “adjusting [his] revenue and non-GAAP EPS estimates to $115.0 million and ($2.03) from $15.0 million and ($2.46).” This massive shift in revenue estimates is “due to an expected opt-in payment from Celgene” for Juno’s CD19 program.
Juno’s report shared data from the Phase II ROCKET trial of JCAR015, its primary pipeline candidate to treat specific forms of cancer, which could potentially gain FDA approval in 2017. While Juno would face competition from other CAR T products on the market, White feels “Juno’s investment to enhance cell expansion and persistence could set it apart from competitors.” Juno is also seeking to improve to the manufacturing efficiency and responses to its therapeutics.
Analyst Edward White has a 14% success rate and -22.5% average loss per recommendation on TipRanks. In the last 3 months, 6 analysts have weighed in on Juno Therapeutics and all are bullish. The average 12 month price target is $66.25.