Healthcare analysts explain why they are bullish on biotech firm Relypsa Inc (NASDAQ:RLYP) and vaccine developer Inovio Pharmaceuticals Inc (NASDAQ:INO) regarding drug launch data and pipeline updates, providing various catalysts for each.
Wedbush analyst Liana Moussatos commented on Relypsa following recent data regarding its Veltassa launch, the company’s hyperkalemia drug, a condition associated with chronic kidney disease and/or heart failure. February data, the second month of the drug’s launch, indicates a 99% m/m increase in new patients taking the drug with a free starter supply, a 254% m/m increase in outpatient prescriptions, and a 109% m/m increase in unit sales to hospitals. According to the analyst, “Compared to recent cardio-renal drug launches, we believe Veltassa’s launch is off to an encouraging start.”
The analyst also comments his predicted sales of the drug. She compared Veltessa’s first two months of launch to the success of heart medications Corlanor and Praluent, reporting sales of $10 million in the first eight and five months of launch, respectively. While the analyst “moved about $1.5 million from Q1 into Q2-Q4, [she] [remains] comfortable with [her] full-year sales estimate.”
Additionally, the analyst mentions Relypsa’s plan to submit a sNDA to the FDA which will include Phase 1 study data. She predicts that the sNDA will “request removal of the black box warning” on the drug, “which could help to accelerate sales beginning in 2017.” Upcoming catalysts for the stock include the “Release of March Veltassa prescription figures around mid-April, [the] potential approval of ZS-9 in late May, and [the] potential Veltassa label update with sNDA approval around year-end.”
The analyst reiterates her Outperform rating for the stock though lowers her price target to $52 from $43. She states, “We corrected our share count from the 10k which reduced our price target by $1.” Liana Moussatos has a 32% success rate recommending stocks with an average return of 1.4% per recommendation. According to TipRanks, out of the 9 analysts who have rated the company in the past 3 months, 8 gave a Buy rating and 1 gave a Sell rating. The average 12-month price target for the stock is $43.50, marking a 245% upside from current levels.
Inovio Pharmaceuticals Inc
Analyst Ram Selvaraju of H.C. Wainwright weighed in on Inovio following various pipeline updates and expected data reports. The company will conduct a Phase 2 meeting with the FDA regarding positive Phase 2 data from the company’s VGX-3100 program, designed to treat HPV-related pre-cancers, in Q2:16. The company will also discuss the Phase 3 trial design, expected to start in 3Q2016. The analyst states, “VGX-3100 is the first therapy to show that activate killer T cells are able to clear neoplastic lesions and the HPV virus. In our view, VGX-3100 is the core asset among Inovio’s extensive pipeline products.”
The analyst also comments on expected data from various ongoing trials in 2016, representing potential catalysts for the stock. He states, “During 2016, we expect Inovio to report data from multiple ongoing trials…Positive data from these studies could drive the company’s stock, in our view.” The analyst specifically mentions the company’s Zika virus vaccine, GLS-5700, and points to further research done on the disease by outside sources. He writes, “We expect to see more research on Zika virus in the coming months to further elucidate the link between Zika virus infection and microcephaly. Of note, Inovio expects to initiate human trials of its Zika virus vaccine (GLS-5700) by the end of 2016.”
According to the analyst, the recent acquisition of Biojet medical technologies and the subsequent synergies it will bring to Inovio represents another catalyst for the stock. Selvaraju states, “Biojet’s devices … have demonstrated utility and safety in animals and humans. Importantly, the combination of jet injection with Inovio’s electroporation technology is capable of reducing administration inconsistency, pain and disposables cost. In our view, this deal complements Inovio’s existing delivery platform to facilitate mass immunization of preventive vaccines being developed by Inovio.” Finally, the analyst notes that Inovio’s $163 million in cash at the end of 2015 should keep the company afloat through 2018.
The analyst reiterates a Buy rating on the stock with a $17 price target. Ram Selvaraju has a 41% success rate recommending stocks with an average return of 0.09% per recommendation. According to TipRanks’ statistics, all 4 analysts who have rated the company in the past 3 months gave Buy ratings. The average 12-month price target for the stock is $18.75, marking a 185% upside from where shares last closed.