Puma Biotechnology Inc (PBYI): Positive Risk/Reward Ahead of ODAC Meeting


It is a good day to be a Puma Biotechnology Inc (NASDAQ:PBYI) investors, with shares soaring 38% and FDA sentiment looking favorably on Neratinib, the firm’s extended adjuvant treatment of HER2-positive early stage breast cancer. Ahead of this Wednesday’s Oncologic Drugs Advisory Committee (ODAC) where the biotech firm’s cancer drug will be under review, J.P. Morgan analyst Cory Kasimov has emerged from the FDA briefing of documents released this morning with quite a “positive” take.

Joining the bullish parade, the analyst reiterates an Overweight rating on shares of PBY with a price target of $89, which represents a just under 71% increase from where the stock is currently trading.

Is all clear for the biotech to receive a good recommendation from the ODAC for the FDA? Not entirely, says the analyst, but enough apprehension has been dissolved from the FDA briefing documents posted today that he is more bullish ahead of the committee’s evaluation.

“Yes, there’s still risk going into the actual panel, but in our view the tone and content of the documents is supportive of neratinib with the FDA pointing to the consistency of the data based on sensitivity analyses. The agency even recognizes that the multiple protocol amendments were done for business reasons (and not a reflection of data). We’re not overly alarmed by the disclosure that the FDA advised Puma not to file in March 2016, as it was that meeting that prompted the substantial number of follow-up sensitivity analyses prefiling (that the agency acknowledges are supportive) […] Not surprisingly, the tolerability profile is cited as a concern, and we still believe the onus is ultimately on Puma representatives at the panel to put the diarrhea in perspective in terms of effect of the prophy regimen and, even more so, the overall duration of this AE (i.e., 2 days),” explains the analyst.

Kasimov concludes anticipating Wednesday will excite investors even further, asserting, “Bottom line, these docs significantly remove the fear of the unknown and make us incrementally more positive ahead of the main event.”

As usual, we recommend taking analyst notes with a grain of salt. According to TipRanks, Cory Kasimov is ranked #4,427 out of 4,556 analysts. Kasimov has a 36% success rate and faces a loss of 6.4% in his annual returns. When suggesting PBYI, Kasimov forfeits 15.7% in average profits on the stock.

TipRanks analytics show PBYI as a Buy. Based on 4 analysts polled by TipRanks in the last 3 months, 2 rate a Buy on Puma stock while 2 maintain a Hold. The 12-month average price target stands at $62.33, marking a nearly 22% upside from where the stock is currently trading.