Leerink and Wedbush analysts highlight potential catalysts for Intercept Pharmaceuticals Inc (NASDAQ:ICPT) and bluebird bio Inc (NASDAQ:BLUE). One analyst believes that better than expected briefing documents ahead of an FDA advisory committee increases chances that drug OCA will win FDA approval in May, resulting in billions of revenue for ICPT. The other argues that European recommendation for approval of a similar competitor gene therapy is a good sign for Bluebird’s pipeline candidates.
Intercept Pharmaceuticals Inc
Wedbush analyst Liana Moussatos explained her opinion of ICPT following better than expected FDA briefing documents for OCA in PBC (primarly biliary cholangitis), a liver disease. The FDA advisory committee is set to meet to discuss OCA in PBC on April 7, with an expected approval date on May 29. The analyst notes an FDA focus of “the validity of the primary endpoints (ALP and bilirubin) and whether the improvement seen in the OCA trials confers a clinically meaningful benefit.” Moussatos warns of two criticisms of the FDA in the briefing documents, such as patient enrollment not reflecting all of the PBC stages in its Phase 3 POISE trial as well as not enough mono-therapy patients enrolled. However, the analyst is not concerned. She explains, “In our view, both of these issues are more of a labeling question and should not affect the approval chances of OCA.” The analyst also highlighted a few FDA safety concerns, though notes “the FDA’s overall conclusion on safety…is supportive of OCA’s approval in our view.” She continues, “In summary, we do not see anything in the briefing documents that would change our view that we anticipate a positive panel vote and first pass approval on the May 29th PDUFA date.”
The analyst notes that the FDA advisory meeting represents “the next material catalyst” for the stock. If the drug is approved in May, the analyst predicts launch in July of this year with peak worldwide annual sales of $2.2 billion.
Liana Moussatos reiterates an Outperform rating on the stock without a price target. According to TipRanks, the analyst has a 37% success rate recommending stocks with an average return of 5.8% per recommendation. Out of the 11 analysts who have rated the stock in the past 3 months, 7 are bullish and 4 remain on the sidelines. The average 12-month price target for the stock is $204.20, marking a 31% upside from current levels.
bluebird bio Inc
Analyst Michael Schmidt of Leerink commented on Blubird following a positive recommendation by the CHMP, a European medical review body, for competitor GSK’s gene therapy Strimbelis, used to combat ultra-rate ADA-SCID, an immune disease in children caused by mutations to the ADA genes. The analyst believes this recommendation is hopeful news for BLUE, who is developing similar ex-vivo gene therapies Lenti-D and LentiGlobin. The analyst states that “conceptually the therapeutic approach is the same and the same fundamental regulatory questions apply, in particular those related to comfort with the safety profile of these therapies.”
Schmit believes that based on the recommendation, Stemvilis “could become the first corrective ex-vivo gene therapy to achieve regulatory approval in the world,” increasing the likelihood of approval for Bluebird’s pipeline drugs. The analyst notes, “We believe the CHMP’s opinion and hence the incremental regulatory de-risking of this category bodes well for BLUE, whose HSC-based “ex-vivo” gene therapies are based on the same therapeutic concept.”
The analyst reiterates an Outperform rating on the company with a $45 price target. According to TipRanks, Michael Schmidt has a 52% success rate recommending stocks with an average return of 1.5% per recommendation. Out of the 5 analysts who have rated the company in the past 3 months, 4 gave a Buy rating while 1 remains on the sidelines. The average 12-month price target for the stock is $89, marking a 78% upside from current levels.