Yesterday morning, California-based biopharm company Ionis Pharmaceuticals Inc (NASDAQ:IONS) made a positive stride with its clinical drug nusinersen, announcing that major motor milestones were achieved in the ENDEAR study for infantile-onset Spinal Muscular Atrophy patients. On the back of these statistically significant results, Cowen analyst Eric Schmidt reiterates a Buy, without offering a price target.

Following clear indication of safety approval with this pipeline drug, Ionis no longer needs to continue the ENDEAR study now that the trial’s primary goals have been met, instead choosing to instead progress to an open-label study (SHINE). Schmidt highlights, “IONS/BIIB also note that other trial endpoints, including the co-primary endpoint of ventilator-free survival trended favorably for nusinersen.” With SHINE, Ionis can still focus on patients with spinal muscular atrophy to not just test the safety of nusinersen, but to further evaluate tolerability and efficacy.

Biotech partner Biogen joins Ionis, also making its intentions known yesterday to exercise the rights to not only develop the drug, but commercialize it worldwide. In the deal, Ionis is set to receive a licensing fee in the amount of $75MM and will  now be eligible for royalties in the sales to come, as well as a maximum of $150MM in milestone payments. Next up will be Biogen’s steps to request the Breakthrough designation for this Spinal Muscular Atrophy therapy.

Schmidt believes in the success of nusinersen, elaborating, “…approval of nusinersen in Type I SMA patients would seem a slam dunk. Moreover, we see little risk that the ongoing CHERISH study in Type 2 patients won’t also achieve its primary endpoint of improved muscle function (as measured by modified Hammersmith scale). We view SMA as a blockbuster opportunity, and expect investor expectations for this market to increase over the next several weeks.”

Especially considering Spinal Muscular Atrophy is the largest genetic cause of infant mortality, Schmidt projects sales could reach $1.8 billion and predicts Ionis peak royalties could garner $11 to $12 per share on an NPV basis. For Schmidt, IONS share success will hinge on the continued success of the SMA drug. The analyst asserts, “We believe the nusinersen program provides some much needed good news to IONS and is likely to reverse the negative sentiment toward shares.”

As usual, we like to include the analyst’s track record when reporting on new analyst notes to give a perspective on the effect it has on stock performance. According to TipRanks, Eric Schmidt is a top analyst, earning a high ranking of #62 out of 4,083 analysts. Schmidt upholds a success rate of 56%, averaging 21% in profits per every recommendation he makes.

TipRanks analytics show IONS stock is a Moderate Buy. Of the 8 analysts who have offered recommendations on Ionis Pharmaceuticals in the last 3 months, 3 rate a Buy, 4 maintain a Hold, and 1 issues a Sell. The 12-month average price target is $31.33, marking over an 18% downside from where the shares last closed.

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