With CytRx Corporation (NYSE:CYTR) shares on the move and Synergy Pharmaceuticals Inc (NASDAQ:SGYP) raring up for a strategically executed launch for its CIC drug Trulance, analysts see these players as ones to watch in the biotech sphere. H.C. Wainwright largely sees an upcoming rolling NDA for CytRX’s Soft Tissue Sarcoma cancer drug Aldox as an encouraging step forward while BTIG highlights “meaningful” sales potential for Trulance on back of discussions with management. Let’s dive in:
CytRX’s Favorable Risk/Reward
CytRx shares keep soaring, gaining another 11% today, after the drug maker reported that following its March meeting with the FDA, the Company’s goal is to submit a rolling NDA under section 505(b)(2) to the FDA for its lead candidate Aldox in 4Q17. But how long can CytRx shares keep this momentum going?
H.C. Wainwright analyst Andrew Fein believes that as the company approaches the start of a rolling submission, shares may begin to reflect some discounted value to account for this surprise NDA.
Fein commented, “As we had guided at the start of the year, clarity on a regulatory strategy forward was likely to hold some upside for the company and its lead asset Aldox, which in our view was no longer viewed as a fileable or an approvable asset by the market following last year’s Phase 3 results. We believe that the key component of yesterday’s update (as well as a key focus of any risk/reward diligence going forward) is the decision to pursue an NDA under section 505(b)(2), which has received an FDA nod.”
Overall, Fein regards the news and the regulatory strategy as incremental positives in the risk/reward equation for CYTR value. The analyst points out that: (a) The new regulatory path is clever; (b) there is FDA green light / buy-in; (c) the target label is broader (no carve outs).
As such, Fein reiterates a Buy rating on CYTR with a price target of $4.00, which represents a potential upside of 580% 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 Fein has a yearly average return of 8.4% and a 48% success rate. Fein has an -29.7% average return when recommending CYTR, and is ranked #552 out of 4559 analysts.
Out of the 4 analysts polled in the past 12 months, 2 rate Cytrx stock a Buy, while 2 rate the stock a Hold. With a return potential of 339.0%, the stock’s consensus target price stands at $2.58.
Synergy All Set for Solid Trulance Launch
Off the pace of recent meetings with the senior Synergy management team in his New York City offices, BTIG analyst Tim Chiang is coming out with confidence for the launch of the biotech firm’s drug Trulance, designed to treat Chronic Idiopathic Constipation (CIC) in adult patients
Therefore, the analyst reiterates a Buy rating on SGYP with price target of $11, which represents a 170% increase from where the shares last closed.
Chiang notes, “We believe the Co.’s commercial efforts behind Trulance are focused on differentiating Trulance (plecanatide; for the treatment of chronic constipation) from other treatments like Linzess (linaclotide; for the treatment of chronic constipation and IBS-C) and Amitiza (lubiprostone; for the treatment of chronic constipation, IBS-C, and opioid-induced constipation).”
A key point from the meeting emphasized a “heavy sampling program,” which will offer 7-day samples to “high prescribing physicians,” which coupled with a commercial team who boasts powerful experience, Chiang sees SGYP’s team as “well-positioned to deliver on solidly executing the launch of Trulance,” forecasting a peak sales projection to circle $500M by 2022.
Anticipating “more gradual” progress for Trulance, considering it will take time for sampling and payer access advantages to settle in place, the analyst subsequently pulls back on sales projections for 2017 from $34M to $21.5M and from $120M to $100M for 2018.
However, “While we are tempering our CY17 and CY18 Trulance sales forecasts to reflect a more gradual ramp, we continue to believe that Trulance has the potential to achieve meaningful sales in the US as a result of the product’s efficacy / side effect profile, which includes a low ~5% incidence of diarrhea,” Chiang concludes, confident on Trulance’s commercial possibilities.
According to TipRanks, which measures analysts’ and bloggers’ success rate based on how their calls perform, four-star analyst Tim Chiang is ranked #574 out of 4,559 analysts. Chiang has a 54% success rate and realizes 12.6% in his yearly returns. However, when recommending SGYP, Chiang loses 4.3% in average profits on the stock.
TipRanks analytics indicate SGYP as a Buy. Based on 6 analysts polled by TipRanks in the last 3 months, 5 rate a Buy on Synergy stock while 1 issues a Sell. The 12-month average price target stands at $13.13, marking a 221% upside from where the stock is currently trading.