Biotech Beat: GW Pharmaceuticals PLC- ADR (GWPH), Celgene Corporation (CELG)


The aftershocks from Brexit continue to weigh on the markets, with the iShares Nasdaq Biotech ETF (IBB) down more than 3% Monday. Among the equities in focus are GW Pharmaceuticals PLC- ADR (NASDAQ:GWPH) and Celgene Corporation (NASDAQ:CELG). Let’s take a closer look.

GW Pharmaceuticals PLC- ADR

While the US stocks are trading in the red today in light of Brexit worries, shares of GW Pharmaceuticals are up 8% after the company announced positive results from its phase 3 trial of Epidiolex in the treatment of rare childhood epilepsy, Lennox-Gastaut Syndrome (LGS).

Cowen analyst Phil Nadeau commented, “We view Epidiolex’s efficacy data in heavily treatment refractory Lennox Gastaut as compelling, with a solid placebo-adjusted effect size, and a robust p value. Moreover, since the efficacy endpoint examined Epidiolex’s reduction in seizure frequency over the full 14 weeks of the trial, the primary endpoint is a conservative look at Epidiolex’s efficacy. What we find particularly impressive is that some patients were made seizure-free by Epidiolex despite having a median of 74 drop seizures per month and having tried a median of 9 other AEDs.”

Furthermore, “We think that these data substantially de-risk Epidiolex’s clinical development. Most important, we think that the positive results from the two Phase III pivotal trials in Dravet and LGS are sufficient to support Epidiolex’s approval, even without the results from Epidiolex’s other Phase III trials.”

“Our 2020 U.S. Epdiolex estimate of $803MM assumes $20MM of sales in Dravet, $100MM in LGS, and $683MM in other refractory pediatric epilepsies. Therefore as we think this morning’s data make it very likely that Epidiolex will be able to secure an FDA approval, it has also helped to de-risk our revenue projections,” the analyst added.

Nadeau reiterated an Outperform rating on shares of shares of GW Pharma, with a price target of $135, which represents a potential upside of 48% from where the stock is currently trading.

According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Phil Nadeau has a yearly average return of -2.6% and a 35% success rate. Nadeau has a 12.7% average return when recommending GWPH, and is ranked #3301 out of 3980 analysts.

All the 6 analysts polled by TipRanks rate GW Pharmaceuticals stock a Buy. With a return potential of 66%, the stock’s consensus target price stands at $150.67.

Celgene Corporation

Canaccord analyst John Newman was out pounding the table on Celgene Monday, reiterating an Outperform rating and price target of $156, which represents a potential upside of 65% from where the stock is currently trading.

Newman wrote, “We believe recent global macro and sector-specific weakness have created an attractive buying opportunity for CELG stock based on core fundamentals. Celgene is trading at a 2016E price/earnings to growth multiple of 0.8, which we believe is undervalued compared to European large cap pharma (average PEG of 2.3), US large cap pharma (average PEG of 2.1), and US large cap biotech peers (average PEG of 1.3). We recommend buying on any continued weakness due to Brexit.”

According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst John Newman has a yearly average return of -19.8% and a 23% success rate. Newman has a -16.8% average return when recommending CELG, and is ranked #3884 out of 3980 analysts.

Out of the 24 analysts polled by TipRanks, 20 rate Celgene Corporation stock a Buy, while 4 rate the stock a Hold. With a return potential of 50%, the stock’s consensus target price stands at $142.53.

CELG Chart

 

  • IJR

    Weed stocks!