Healthcare analysts are weighing in on biotech companies Galena Biopharma Inc (NASDAQ:GALE) and Lipocine Inc (NASDAQ:LPCN), as shares of both companies fell sharply today, reaching record lows. Let’s take a closer look:
Galena Biopharma Inc
Shares of Galena Biopharma lost over 80% of their value today after the company discontinued its phase 3 interim analysis on Neuvax, its lead breast cancer vaccine, after an independent data monitoring committee recommended that the phase three trial be stopped due to futility. The data concluded that the vaccine was ineffective at preventing tumors from recurring compared to the placebo.
In reaction, Noble Financial analyst Kumaraguru Raja downgraded the stock from Buy to Hold, while slashing the price target to $0.40 (from $3.50).
Raja commented, “While the trials are ongoing/planned, we await clarity on next steps for the NeuVax Phase 2 combination trials with Herceptin in breast cancer, Phase 2 trial with NeuVax as a single agent in ductal carcinoma in situ (DCIS) and gastric cancer Phase 2 trial, following the negative outcome from the interim analysis of PRESENT trial.” Furthermore, “The company will evaluate data from the PRESENT trial and will provide an update on the path forward. We believe that the focus should be on developing the most promising assets in the pipeline while conserving resources.”
According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Kumaraguru Raja has a yearly average return of 12.1% and a 75% success rate. Raja is ranked #1549 out of 3980 analysts.
Shareholders of Lipocine are having a rough day as the company’s stock is down over 50% after the company received a Complete Response Letter from the FDA regarding its New Drug Application (NDA) for LPCN 1021, an oral testosterone product candidate for testosterone replacement therapy in adult males for conditions associated with a deficiency or absence of endogenous testosterone, also known as hypogonadism.
Reacting was Canaccord analyst John Newman, which reduced the price target to $6.00 (from $15.00), while reiterating a Buy rating on the stock.
Newman commented, “Lipocine’s proposed LPCN 1021 titration schedule was different than Phase 3, prompting a Complete Response Letter from FDA, but it is unclear if additional trials will be needed. Importantly, we do not believe Lipocine had yet entered formal label discussions with FDA. FDA is apparently seeking a simpler single-point titration scheme within a 24-hour time window, vs the multiple titration time points used by Lipocine in its Phase 3 trials. Accordingly, FDA and Lipocine may look at the percentage of patients reaching goal testosterone levels after a single titration. Importantly, Lipocine believes that the underlying data is acceptable to FDA, but we await the outcome of a meeting with the agency.”
“We are lowering our price target to $6 from $15 based on the Complete Response Letter for LPCN 1021 and uncertainty going forward. Lipocine may simply need to submit a simpler titration schedule to FDA for product labeling , or another study may be needed. In any event, we see at least a year delay to any potential product launch and have adjusted our model accordingly,” the analyst concluded.
According to TipRanks.com, analyst John Newman has a yearly average return of -19.6% and a 23% success rate. Newman has a -25.9% average return when recommending LPCN, and is ranked #3877 out of 3980 analysts.