In a research report released yesterday, J.P. Morgan analyst Cory Kasimov maintained a Neutral rating on shares of Ariad Pharmaceuticals, Inc. (NASDAQ:ARIA) and raised the price target to $9 (from $8), based on estimate revisions. The analyst updated his model for the recent second-quarter results, and remains within the updated guidance: Iclusig revenue of $130-140M (reiterated), R&D expense of $177-183M (vs. $185- 195M previously), SG&A of $166-172M which includes severance and proxy-related costs (vs. $135-145M previously).
Kasimov wrote, “At this stage we are waiting for three things 1) who the new CEO will be, 2) getting the three new Iclusig trials up and running (which remains critical as data from the dosing trial will be key to answer Q’s around dosing/efficacy), and 3) a potential partnership for brigatinib (if at all). ARIA gave some clarity on the synthetic-royalty financing for brigatinib, noting that this was done to accelerate the initiation of the 1L superiority trial vs. crizotinib, as partnering discussions have been put on hold due to an assessment of the company’s long-term strategy with a new CEO.”
Bottom line: “We believe label expansion/growing the addressable market for Iclusig is critical, and the planned studies in earlier lines of therapy plus the doseranging trial could potentially provide more clarity/confidence in the drug’s ultimate market opportunity. That said, these important data are still a long way off.”
According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Cory Kasimov has a total average return of 13.9% and a 59.7% success rate. Kasimov has a 5.6% average return when recommending ARIA, and is ranked #221 out of 3727 analysts.
Out of the 9 analysts polled by TipRanks, 4 rate Ariad Pharmaceuticals stock a Buy, 3 rate the stock a Hold and 2 recommend Sell. With a return potential of 9.8%, the stock’s consensus target price stands at $8.50.