Healthcare analysts are weighing in on prostate cancer drug maker Medivation Inc (NASDAQ:MDVN) and biopharmaceutical company Genocea Biosciences Inc (NASDAQ:GNCA). While one analyst provides an acquisition scenario analysis for Medivation, the other reflects on Genocea’s Phase 2 trial of GEN-003 in HSV-2 patients.
Medivation shares are up 23% on Thursday at lunchtime following the news that the company hired bankers to defend itself against a potential takeover. Subsequently, Credit Suisse analyst Kennen MacKay conducted an acquisition scenario analysis for Medivation. In addition, the analyst has updated his Q1:16 and FY:16 Xtandi numbers based on scripts to-date, resulting in a new price target.
MacKay noted, “Our analysis suggests MDVN could be worth $54-$59/sh on operational synergies, and $60-$75/sh with leveraged tax benefits […] MDVN’s product and pipeline portfolio (prostate, breast, and blood cancer) synergize with those of Sanofi (Taxotere, Jevtana), AstraZeneca (Casodex, Lynparza, Arimidex/Nolvadex), and Roche (Xeloda, Herceptin, Perjeta, Avastin, Rituxan). We have composed a DCF model adjusting for each potential acquirer’s synergies regarding MDVN revenues, COGS, R&D, and SG&A and tax rate. However, given MDVN’s manufacturing and intellectual property is already domiciled in the US, it is unclear whether tax advantages could be leveraged in a deal.”
The analyst reiterated an Outperform rating on shares of Medivation, while slightly raising the price target to $49 (from $48), which represents a potential upside of 5% from where the stock is currently trading.
According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Kennen MacKay has a yearly average return of -10% and a 19% success rate. MacKay has a 6.5% average return when recommending MDVN, and is ranked #3303 out of 3840 analysts.
Out of the 9 analysts polled by TipRanks (in the past 3 months), 6 are bullish on Medivation stock, while 3 remain bearish. With a return potential of 12%, the stock’s consensus target price stands at $51.40.
Genocea Biosciences Inc
Genocea Biosciences shareholders celebrate a 25% gain in the stock after the company announced positive 12-month efficacy data related to GEN-003 phase 2 trial in HSV-2 patients.
Needham analyst Alan Carr was the first to comment, “Data suggest a more durable impact on viral shedding than previously expected. The prior Phase 1/ 2 trial evaluated lower doses of vaccine and did not provide clear indications of efficacy beyond 6mo. The two highest doses tested in the Phase 2 dose-optimization trial suggest GEN-003 may have consistent and substantial impact on viral shedding through 12mo. We believe this has a favorable impact on GEN-003 commercial profile.”
“We are still waiting, however, for confirmation of impact on symptoms (i.e. lesions). Registration trial endpoints will be tied to lesions. Although there appears to be a favorable impact on lesions in Phase 2 dose-optimization trial, interpretation is complicated by absence of placebo arm at 6mo and 12mo assessments. We await results from placebo-controlled Phase 2b trial in 2H16, which we expect to provide better insight into efficacy and impact on symptoms than prior trials,” the analyst continued.
Carr reiterated a Buy rating on shares of Genocea Biosciences with a price target of $15, which implies an upside of 202% from current levels.
According to TipRanks.com, analyst Alan Carr has a total average return of 11% and a 44% success rate. Carr has a -44.5% average return when recommending GNCA, and is ranked #200 out of 3840 analysts.