The biotech-verse is rumbling as Cempra Inc (NASDAQ:CEMP) shares tumble despite a positive AdCom vote and Ariad Pharmaceuticals, Inc. (NASDAQ:ARIA) surges ahead on back of a great quarterly performance. Healthcare analysts share insights, with Needham cutting the price target for CEMP amid skepticism on corporate credibility and with Cowen confident on Ariad’s fundamentals despite the biotech firm’s recent drug pricing controversy. Let’s take a closer look:

Cempra Inc

In the Animicrobial Drugs Advisory Committee, Cempra garnered a “narrow positive” AdCom vote for the firm’s pipeline drug Solithera, an antibiotic designed to treat community-acquired bacterial pneumonia (CABP) in a 7-6 turnout in favor of the drug’s risk-benefit profile. Though shares in reaction are falling 5%, as management failed to indicate adverse events that were pinpointed amid the COPD study, Needham analyst Alan Carr reiterates a Buy rating on CEMP while slashing the price target from $36 to $15 on back of pulled back sales expectations.

Carr explains, “We expect FDA to approve the drug, although timing is unclear given manufacturing issues raised two wks ago. Hepatotoxicity, as expected, was a core part of discussion and drove risk-benefit analysis by committee. Most members recognized need for new antibiotics and efficacy of Solithera was generally not questioned. Importantly, FDA proposed removal of load dose in IV/ oral regimen to improve profile, which we interpret as a sign that agency is inclined to approve the drug. We recognize there are legitimate mgmt credibility issues, but stock is worth more than current valuation in our opinion and reiterate BUY.”

“Lastly, mgmt exercised remarkably poor judgment, in our opinion, in decision not to disclose material adverse events observed in COPD trial. Credibility is therefore a concern, but we believe there is a floor to valuation that reflects at least modest Solithera commercial success,” Carr contends.

According to TipRanks, which measures analysts’ and bloggers’ success rate based on how their calls perform, four-star analyst Alan Carr is ranked #976 out of 4,162 analysts. Carr has a 38% success rate and realizes 2.1% in his annual returns. However, when suggesting CEMP, Carr forfeits 21.5% in average profits on the stock.

TipRanks analytics exhibit CEMP as a Buy. Based on 9 analysts polled in the last 3 months, 4 rate a Buy on CEMP, 4 maintain a Hold, while 1 issues a Sell. The 12-month price target stands at $19.40, marking a 188% upside from where the shares last closed. screen-shot-11-07-16-at-09-49-pm

Ariad Pharmaceuticals

Ariad shares are on an almost 9% climb after delivering an earnings beat today. In reaction to the earnings and despite last week’s ruffled feathers over the firm’s fourth price hike this year for its drug Iclusig, used in the treatment of chronic myeloid leukemia (CML), Cowen analyst Chris Shibutani remains confident. As such, the analyst reiterates an Outperform rating on shares of ARIA with a $16 price target, which represents a close to 66% increase from current levels.

With his positive take on ARIA’s quarterly print, Shibutani affirms, “Our quick look at 3Q16 results: Financial performance solid and pipeline progress in particular with Brigatinib (75% of our DCF driven valuation) is very much on track. We reiterate our outperform rating on fundamentals. The drug pricing controversy remains an overhang, but in our view, downside risks more than sufficiently reflected at current share price levels.”

“3Q16 results strong. How the top-line numbers are presented versus our (and we believe, Street) models, under-represents the operational revenue beat,” the analyst contends.

For the third quarter, the biotech firm yielded total reported revenues of $46.0MM. Though the analyst had anticipated slightly above with an estimate of $46.5MM, revenues beat the Street’s projection of $42.9MM. “Importantly” to Shibutani, the firm’s $33.6MM in U.S. sales outperformed his expectation of $31.1MM. Meanwhile, operating expenses fell “in line” and management maintained guidance, “as expected,” the analyst notes.

Additionally, total reported sales for Iclusig, reached $34.3MM. Though the firm announced “no incremental pipeline news,” the analyst underscores that Ariad has “multiple trials and programs on track.”

Looking ahead, recently the firm announced that its pipeline drug brigatinib, an investigational tyrosine kinase inhibitor designed to treat patients with anaplastic lymphoma kinase-positive (ALK+) advanced non-small cell lung cancer (NSCLC), has received a Priority Review from the FDA with a PDUFA date set for April 29, 2017. Regarding the “Iclusig Drug Pricing controversy,” Shibutani awaits further details.

As usual, we recommend taking analyst notes with a grain of salt. According to TipRanks, one-star analyst Chris Shibutani is ranked #3,515 out of 4,162 analysts. Shibutani has a 31% success rate and faces a loss of 6.3% in his yearly returns. However, when recommending ARIA, Shibutani earns 5.3% in average profits on the stock.

TipRanks analytics demonstrate ARIA as a Buy. Out of 8 analysts polled by TipRanks, 5 are bullish on Ariad stock, 2 remain sidelined, while 1 is bearish on the stock. With a return potential of nearly 40%, the stock’s consensus target price stands at $13.42.screen-shot-11-07-16-at-09-50-pm