Healthcare companies Insys Therapeutics Inc (NASDAQ:INSY) and Horizon Pharma PLC (NASDAQ:HZNP) both received bullish sentiments from analysts this past week. Insys’ newest drug, Syndros, was just approved by the FDA while a medical expert gave a strong recommendation for Horizon’s unique enzyme therapy.
Insys Therapeutics Inc
Analyst David Amsellem of Piper Jaffray provided his insights for Insys following the approval of its newest drug, Syndros. Syndros is a liquid formulation of dronabinol, a pharmaceutical version of THC. It was approved to treat anorexia, especially in AIDS patients, as well as nausea and vomiting that comes with receiving chemotherapy.
The FDA approved the drug, but the company is still waiting for a controlled substance designation from the DEA. This designation dictates the drug’s acceptable medical use and is broken into five schedules. The analyst believes that even if Syndros receives the more restrictive schedule II designation, indicating the drug has a high potential for abuse, it shouldn’t have a major impact on the drug’s potential sales. Amsellem still expects peak sales of $300M-$400M with a long-term EPS growth of 25%-30%.
Syndros’ approval led the analyst to reiterate his Overweight rating for Insys with a price target of $28, marking an increase of 94% from current levels.
According to TipRanks, out of the 4 analysts who have rated the company in the past 3 months, 3 analysts gave a Buy rating and 1 analyst gave a Hold rating. The average 12-month price target for the stock is $22.33, marking a 55.07% upside from current levels.
Horizon Pharma PLC
Analyst Annabel Samimy of Stifel Nicolaus went into detail about Horizon Pharma’s FDA approved drug Krystexxa after a recent investor call with prominent immunologist, Dr. Peter Lipsky. Krystexxa was developed by Savient Pharmaceuticals, which was acquired by Horizon in 2015, and is used to treat chronic refractory gout. It is currently the only enzyme therapy in the market that lowers uric acid levels and reduces buildup of uric acid crystals. This allows Krystexxa to lower uric acid levels more quickly than any other therapy.
During this call, Dr. Lipsky made it clear the advantages Krystexxa offers over other treatments, “particularly relating to rapid onset and time to disease resolution.” The doctor also addressed how the therapy, unlike other types of therapy, makes it easier to identify and manage immunogenicity. Additionally, he believes that the patient population for Krystexxa is 200-400K, which is well above Horizon Pharma’s estimate of 50K.
Dr. Lipsky also gave his insights into Krystexxa’s failed launch a few years ago, concluding education of the therapy was the biggest issue. The therapy was advertised to patients with chronic refractory gout. This is not the commonly used term in the clinical community, which led to confusion regarding who the therapy targets.
This coming November, the analyst expects the findings “from clinical data base analyses” will address the shortcoming of the failed launch. Samimy expects the data will back up Dr. Lipsky’s confidence in prescribing Krystexxa.
The analyst reiterated her Buy rating with a target price of $45, marking a 169% increase from current levels. Samimy has a success rate of 54% with an average return of 8.8% per recommendation.
According to TipRanks, out of the 7 analysts who have rated the company in the past 3 months, 86% gave a Buy rating and 14% gave a Hold rating. The average 12-month price target for the stock is $30.33, marking a 81.40% upside from current levels.