This Top Analyst Cheers Loxo Oncology Inc (LOXO) Clinical Progress as Shares Soar 26%


Loxo Oncology Inc (NASDAQ:LOXO) gave investors cause to celebrate today, to the tune of shares rocketing 26%, after providing an encouraging regulatory update for its pipeline of targeted kinase inhibitors, which includes its lead candidate LOXO-101 larotrectinib. For top analyst Eric Schmidt at Cowen, the biotech firm has made such strides that he firmly sings its praises, joining today’s bullish parade,¬†reiterating an Outperform rating on shares of LOXO without suggesting a price target.

Schmidt posits, “We are encouraged that Loxo has been able to enroll ‘many dozens’ of TRK-fusion patients into the pivotal Phase II NAVIGATE trial and that this study is now ~85% enrolled. We also place importance on Loxo commentary that the activity observed in NAVIGATE is similar to the reported Phase I experience, and that CNS responses have been observed. While there had been indications that Loxo might be able to use NAVIGATE to file for a broad label covering all tumor histologies, we are pleased that management has been able to confirm such a strategy. This will be particularly important given that over 10 tumor types are represented in NAVIGATE.”

Looking ahead, the analyst models a 2019 launch for the pipeline drug with expectations for first year sales to circle $3MM. Additionally, contingent upon an NDA filing by the close of 2017 coupled with a priority review, the analyst finds it entirely¬†within reach for LOXO for larotrectinib’s initial sales to jump-start come 2018.

Ultimately, “Loxo has committed to a larotrectinib NDA for patients with TRK-fusions regardless of tumor histology in late 2017/early 2018. We are highly impressed by the breadth, depth, and duration of responses to larotrectinib, and believe the drug has $500MM+ in commercial potential,” Schmidt contends, recognizing a future full of promise for the firm.

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, top five-star analyst Eric Schmidt has achieved a high ranking of #93 out of 4,283 analysts. Schmidt upholds a 52% success rate and garner 18.8% in his annual returns. When recommending LOXO, Schmidt earns 7.6% in average profits on the stock.

Additionally, Kennen MacKay of Credit Suisse rates a Buy on LOXO without listing a price target, Christopher Marai of Oppenheimer rates a Buy with a $30 price target, Stephen Willey of Stifel Nicolaus rates a Buy with a $36 price target, and Yigal Nochomovitz of Citigroup rates a Buy with a $25 price target.