As always, it’s been a busy week in the biotechnology sector. Analysts remain bullish on both bluebird bio Inc (NASDAQ:BLUE) on the back of ASH Abstract data and Clovis Oncology Inc (NASDAQ:CLVS) following FDA approval setback.
Clovis Oncology Inc
Analyst Thomas Shrader of Stifel maintained a Buy rating on Clovis Oncology though slashed his price target from $140 to $45 after the company provided an update on Rociletinib, which aims to treat cancer, specifically lung cancer.
In the drug’s recent FDA update, Rociletinib looks inferior to Tagrisso, a similar drug made by AstraZeneca that was just approved. Shrader explains that Rociletinib was believed the reduce tumor sizes by 55%, but recent studies shows it only reduces tumors by 30%. He explains, “Overall, the difference in response rate from about 55% based on preliminary determinations to about 30% based on readings at a central site is bigger than we have ever seen but probably reflects the degree of tumor burden in these very sick patients.” However, Shrader is not abandoning ship just yet, noting, “We believe that when the dust settles, Rociletinib is still an approvable drug but approval will be delayed and the initial sales ramp will be more gradual.”
Thomas Shrader has a 59% overall success rate recommending stocks with a +5.5% average return per rating. According to the 5 analysts polled by TipRanks in the last 3 months, 2 are bullish on Clovis while 3 remain on the sidelines. The average 12-month price target is $51.50, marking a 70% potential upside from where shares last closed.
bluebird bio Inc
Eric Schmidt of Cowen reiterated an Outperform rating on Bluebird Bio though he did not provide a price target. The rating comes after the company released a late breaking report for the American Society of Hematology, or ASH, conference that highlighted promising data.
The report highlighted data from anti-BCMA CAR in myeloma. The company uses CAR T technology, which uses a patient’s white blood cells to activate specific T cells to grow. BCMA is a type of T cell therapy and is described as a “cell surface protein that is expressed in normal plasma cells and in most multiple myeloma cells, but is absent from other normal tissues.”
Schmidt highlights the positive data from the report, noting that it is “the first clinical report on CAR targeting BCMA in myeloma patients.” He continues, “The ASH abstract describes considerable clinical activity that appears dose dependent, though adverse events, including the ability to manage CRS, will need to be monitored going forward.” The analyst believes that the late breaker status of the report indicates high interest in the strategy. He adds that Bluebird and its partner, Celgene, “do not intend to advance this construct” and instead will initiate clinical trials for bb2121 early next year. The pipeline drug bb2121 will be an improved anti-BCMA CAR therapy.
Eric Schmidt has a 56% overall success rate recommending stocks with a +29.9% average return per rating. Like Schmidt, all ten analysts polled by TipRanks in the last 3 months are bullish on BLUE with a 12-month average price target of $161.88, marking a 117% potential upside from current levels.
