Clovis Oncology Inc
Piper Jaffray analyst Joshua Schimmer is out with commentary on Clovis Oncology, after an independent panel of experts advising the U.S. FDA voted 12-1 to delay approval of Clovis’s lung cancer drug rociletinib pending the TIGER-3 (rociletinib vs chemotherapy) study results. Clovis shares reacted to the news, falling nearly 12% as of this writing.
Breazzano commented, “Ultimately, the panelists were not swayed by roci’s benefit / risk with a ~10% increase in ORR relative to available therapy in cross trial comparisons given the safety and dosing concerns. Implicit acknowledgment from several panelists on the availability of Tagrisso and other options also weighed on their decision. As such, we view the narrow potential window of accelerated approval as essentially shut and see no viable regulatory or commercial path forward for roci.”
“Following the PDUFA on June 28 and a negative FDA decision, we would not be surprised if management halted all ongoing development of rociletinib. Even with potential differentiation in T790M negative patients and immunotherapy combinations, the toxicity and dose issues raised by FDA weigh on these opportunities as well. That said, we do not currently model any rociletinib revenue and believe that halting all development to conserve cash and create optionality for the company may ultimately represent the most constructive path forward,” the analyst concluded.
Breazzano reiterated a Neutral rating on shares of Clovis Oncology with a price target of $18.
According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Joshua Schimmer has a yearly average return of -17% and a 26% success rate. Schimmer is ranked #3784 out of 3857 analysts.
Horizon Pharma PLC
It has been a horrid day for shareholders of Horizon Pharma, as the company’s shares fell nearly 26%, reaching record lows, after reporting disappointing guidance, with first half estimates came in meaningfully below consensus.
Mizuho Securities analyst Irina Rivkind Koffler was the first to comment: “We initially thought 2016 guidance was extremely beatable, but now could be a slight stretch. Management believes it can compensate for its higher than expected discounting via strength in the Pennsaid business and in robust performance from Krystexxa, which is officially re-launching in May. Even if it falls slightly short, we don’t think the stock reaction is warranted.”
“While we understand the overall consternation around this name, we see an over-reaction in the stock and think that HZNP again appears to be oversold, in our view. We are reevaluating our estimates and PT, but note that even if 2016 EPS needs to be haircut by 20% to the ~$2 range (in case we don’t believe that guidance is realistic), today the stock is still trading at a significant discount to the group (8-10x range). We therefore recommend buying into weakness,” the analyst continued.
The analyst reiterated a Buy rating on Horizon Pharma shares, with a price target of $34, which represents a potential upside of 150% from where the stock is currently trading.
According to TipRanks.com, analyst Irina Rivkind Koffler has a yearly average return of 28% and a 55% success rate. Koffler has a -0.3% average return when recommending HZNP, and is ranked #12 out of 3787 analysts.