Credit Suisse analyst Erin Wilson weighed in on Aratana Therapeutics (NASDAQ:PETX), after the pet biopharmaceutical company reported second-quarter results, posting EPS of ($0.48), below Wilson’s projection of ($0.39). However, for Wilson, pet biotech companies play a different game, and the earnings rules don’t apply as “meaningful catalysts.” With sharp focus instead on new developments on the rise, Wilson reiterates a Buy rating with a price target of $11, marking a 30% increase from where the stock is currently trading.

Importantly of note in the works is a $38 million contribution from collaborator Elanco (Eli Lilly), which paired with higher operating expenses and an impairment charge of $3 million will offset better product revenues. As such, reflecting the miss and taking into account the surge in expenses along with the $1.09 per share Elanco contribution, Wilson adjusts 2016 EPS, from $1.65 to -$0.76. A positive in Aratana’s favor lies in product revenues, $47,000 well ahead of the plan for $25,000. Cash flow of $110 million, which includes Elanco’s $45 million, in Wilson’s eyes will be “sufficient to fund operations for NT product launches.”

Wilson looks to new developments, highlighting, “The initiation of its AT-003 pivotal study for post-operative pain in cats, and it also regained rights to AT- 006 (feline ocular herpes virus) from Elanco, providing potential upside to our model. Up next, all eyes are on the commercial rollout of Galliprant, a new animal drug intended to control pain and inflammation associated with osteoarthritis in dogs, in the coming months where our bias remains positive on longer term prospects, particularly with support from the third largest animal health company Elanco.” Wilson suggests the key to understanding the value in PETX stock lies in commercial opportunity more than the story told by its earnings reports.

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, Erin Wilson is a five-star analyst ranked #359 out of 4,101 analysts. Wilson has reached a high success rating of 76% and realizes 17.4% in her annual returns. When recommending PETX, Wilson yields a solid 47.2% in average profits on the stock.

TipRanks analytics exhibit PETX as a Buy. Both analysts polled in the last 3 months rate a Buy. The consensus price target stands at $13.00, marking a nearly 54% upside from where the shares last closed.