Healthcare analysts provide their insights on Endo International plc – Ordinary Shares (NASDAQ:ENDP) and Cytokinetics, Inc. (NASDAQ:CYTK) following a new patent and management meeting, respectively. While one analyst remains on the sidelines for ENDO, believing a patent is not enough to completely block competition, the other has high hopes for CYTK in anticipation that its partner will commence Phase 3 development for a heart failure drug.

Endo International plc – Ordinary Shares

Analyst Rohit Vanjani of Oppenheimer explained his thoughts on ENDO following news that one of its operating companies, Par Pharmaceuticals, was issued a new patent by the FDA for Vasostrict, its injectable cardiovascular medication. The company also announced that it has received an orange book listing for the drug, which means that any abbreviated new drug application that would like FDA approval for the generic version of vasostrict before the patent expires in 2035 must notify PAR before it can obtain FDA approval.

Following the announcement, shares rose 18%. The analyst states, “We believe the significant move in the stock was largely reflective of a short squeeze.” Vanjani notes that prior to the orange book listing, the company was confident it would have exclusive market share and did not provide insights on any competitive threats in guidance. However, the analyst notes that this overconfidence worried investors, highlighting a previous incident. He explains, “The possibility of another Voltaren Gel scenario with an unexpected launch of a generic was always on investors’ minds.”

Vanjani notes that while the patent and orange book listing “[are] certainly a positive for Endo,” there is still ways for competitors to launch generic version of the drug, such as ANDAs filed before the patent issuance. Similarly, the analyst states that it will be difficult for ENDO to make any claims against already existing competitors. Vanjani states that the patent may not be enough to drive new competitors out, as they can avoid patent infringement. He explains, “Our consultant conversations indicate that, while the combination of API scarcity and an issued patent is a strong barrier for Endo, generic filers may still seek the older formulation of Vasostrict, potentially bypassing the ‘478 patent.”

The analyst reiterates a Perform rating on the stock without a price target.

Rohit Vanjani has a 50% success rate recommending stocks with a 5.9% average return per recommendation. According to TipRanks, out of all the analysts who have rated the company in the past 3 months, 62% gave a Buy rating while 38% remain neutral. The average 12-month price target for the stock is $31.55, marking a 102% upside from current levels.

Cytokinetics, Inc.

Roth Capital analyst Joseph Pantginis commented on Cytokietics following management meetings with AMGEN, the company’s global partner in developing omecamtiv merarbil, its treatemetn of ventricular systolic heart failure, at its third annual ROTH London Corporate Access Day. The analyst anticipates that Amgen will move the drug into phase 3 development but is unclear of the timing of the announcement.

The analyst mentions a few positive points, including an ongoing 9 month discussion to move the drug forward, completed regulatory discussions, and asset protocol. The analyst believes that CYTK is set to benefit from any Amgen decisions .He explains, “Amgen is currently in the middle of making an important business decision and this is where we believe CYTK’s positioning is strong across a broad set of scenarios.” While the phase 3 program will be a “significant expense” for Amgen, the analyst notes that the company is “addressing a major market.”

Although Amgen has not made any announcements on Phase 3, the analyst is anticipating good news. He states “Based on the differentiated profile omecamtiv mecarbil brings to bare, we believe Amgen will move forward with the Phase III as the drug’s mechanism should be complementary to other heart failure standards of care, including Entresto.”

The analyst reiterates a Buy rating and $22 price target for CYTK. He states, “We believe that CYTK has provided important partnering validation on two fronts, thus far, and expect important regulatory visibility and data catalysts. We believe the expected dynamic for shares going forward make an investment in CYTK compelling.”

According to TipRanks, only 2 analysts rated the company in the last 3 months, both with a Buy rating. The average 12-month price target for the stock is $23, marking a 133% upside from current levels.