William Blair Speculates on Ariad Pharmaceuticals, Inc. (ARIA) Following Updated ALTA Data


Ariad Pharmaceuticals, Inc. (NASDAQ:ARIA) recently presented updated data from the pivotal ALTA trial of brigatinib in refractory ALK+ non–small-cell lung cancer (NSCLC) was presented at the 2017 World Conference on Lung Cancer (WCLC) annual meeting in Vienna.

On back of data that indicates what William Blair analyst Y Katherine Xu recognizes as a “best-in-class profile” for the pipeline drug, the analyst reiterates an Outperform rating on shares of ARIAD with a $15 price target, which represents a 14% increase from where the stock is currently trading.

This data follows what was already presented in June 2016 with three further months of results and includes three crucial highlights. First, brigatinib exhibits best-in-class median progression-free survival (PFS) for the 180 mg arm of 15.6 months, a surge from 12.9 months prior. Secondly, the drug shows a rate of one-year survival of 82%, an 80% rise from previous results. Thirdly, the data reveals newly reported best-in-class intracranial (IC) PFS of 18.4 months.

Xu believes, “We note that on each of these metrics, brigatinib continues to compare favorably against approved agents Zykadia (Novartis [NVS $68.62]) and Alecensa (Roche [RHBBY $27.44]) in the same setting. Such data support our $790 million peak worldwide sales estimate for brigatinib.”

Overall, “Among the first three second-generation agents, we believe the data to date supports a competitive profile for brigatinib, differentiated from the competition on best-in-class resistance profile, progression-free survival, and CNS activity. We model brigatinib as the second market share taker in the frontline setting after Alecensa, which has an 18-month head start in the marketplace. We expect brigatinib to be approved in the second-line setting in April 2017, and assign a 90% probability,” Xu concludes.

According to TipRanks, which measures analysts’ and bloggers’ success rate based on how their calls perform, one-star analyst Y Katherine Xu is ranked #3,101 out of 4,274 analysts. Xu has a 44% success rate and faces a loss of 1.0% in her annual returns. However, when suggesting ARIA, Xu earns 8.4% in average profits on the stock.

TipRanks analytics demonstrate ARIA as a Buy. Out of 9 analysts polled by TipRanks in the last 3 months by TipRanks, 5 are bullish on Ariad stock, 2 remain sidelined, and 2 are bearish on the stock. With a loss potential of 1%, the stock’s consensus target price stands at $12.79.

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