Valeant’s Siliq Not Competitive Enough in Psoriasis Market

Valeant Pharmaceuticals Intl Inc’s (NYSE:VRX) fighting chances in the drug arena to compete may have just gotten slimmer. Why? Rival Johnson & Johnson’s moderate-to-severe psoriasis treating drug Tremfya (guselkumab) gained a green light from the FDA last Wednesday, and Wells Fargo analyst David Maris believes this spells trouble for the biotech giant. None of Valeant’s other competitors suffer from the blackbox warning that Siliq (brodalumab) touts, warning of a suicide risk that could put Valeant in jeopardy against the likes of Lilly, Abbvie, Novartis, and now Johnson & Johnson trying to garner the best edge in the psoriasis market.

Johnson & Johnson benefited from an expedited regulatory review from the agency that came on back of applying for a Priority Review Voucher, and 70% of patients exhibited at minimum 90% skin clearance improvement by the 16th week of treatment. Therefore, Johnson & Johnson appears ready to bring the heat in the biotech-verse, and Valeant’s shares could be under pressure.

In reaction to Tremyfa’s approval, where patients demonstrated meaningfully clearer skin and improved plaque psoriasis symptoms from itching to the pain factor to stinging, burning, and skin tightness, the analyst remains bearish on Valeant’s odds moving forward. As such, Maris reiterates an Underperform rating on shares of VRX without listing a price target. (To watch Maris’ track record, click here.)

“In addition, VRX has still not launched its drug (in 2016, VRX thought it would be launched in 2016 – now it says 2H17). With Taltz from Lilly, Humira from Abbvie, Cosentyx from Novartis, and now this new competitor from J&J, we do not see VRX as competitive in this market, especially with the marketing dollars others are spending and the black box warning Valeant’s drug has (which none of the others have). Add to this that Valeant’s drug Siliq is dosed every two weeks, while others have far fewer injections. For example, the new approval from J&J is dosed every eight weeks according to press reports and Cosentyx is dosed every four weeks. We have peak sales in our model of $250MM for Valeant’s Siliq and this may prove optimistic given the competition,” concludes Maris, concerned that the more options that become available for patients suffering from plaque psoriasis, the less likely it looks for Valeant’s Siliq to be the chosen drug treatment.

TipRanks analytics demonstrate VRX as a Hold. Out of 15 analysts polled by TipRanks in the last 3 months, 3 are bullish on Valeant stock, 9 remain sidelined, and 3 are bearish on the stock. With a return potential of nearly 4%, the stock’s consensus target price stands at $17.91.

Teva Primed to Enter Multi-Billion Market

After just hosting a marketing event with Teva Pharmaceutical Industries Ltd (ADR) (NYSE:TEVA) in New York, Maxim analyst Gabrielle Zhou is cautiously optimistic on the biotech giant. The biotech giant’s leaders, including its President of Global R&D as well as its Chief Scientific Officer offered new insight into the company’s present R&D mentality as it tackles progress in the central nervous system (CNS) ring.

Additionally, Teva continues its search for its new CEO, with eyes pointing to Pascal Soriot, the chief executive from AstraZeneca, and the analyst notes that while the news is not official just yet, “[…] we are hopeful that Teva has made progress in searching for a new leader for the company.”

For now, the analyst plays it safe with the stock, reiterating a Hold rating on shares of TEVA with a $35 price target, which represents a 9% increase from current levels. (To watch Zhou’s track record, click here.)

Commercially, odds look promising for Teva, as Zhou asserts, “The significant clinical outcomes set the stage for Teva to enter a multibillion market with potential premium pricing, where there is no sustainable treatment currently available for patients suffering with migraine. Teva plans to submit the BLA (Biologics License Application) and expects to launch Fremanezumab in 2H18.”

Ultimately, it boils down to Teva’s long-term game plan, surmises the analyst, underscoring, “The key takeaway from the event was Teva’s long-term strategy will be more focused on high margin innovative therapies. While Teva is starting to extract synergies from the Actavis acquisition, the successful clinical results of fremanezumab and recent FDA approval on Austeda for chorea associated with Huntington’s disease, along with its developments in the biosimilars space support the company’s plan and vision on moving into a new chapter of developments.”

Ahead of the giant’s second-quarterly print for the year, the analyst has tweaked her revenue expectations on generic sales to be more “in line” with Teva’s outlook, considering the majority of generic launches are set for the back half of 2017. As such, the analyst has taken her revenue projection for the second quarter from $5.9 billion to $5.8 billion, for the third quarter from $6.1 billion, maintained her estimate for the third quarter at $6.1 billion, but tweaked fourth quarter expectations from $6.5 billion to $6.6 billion. For 2017 in total revenues, the analyst still anticipates Teva will bring in $24 billion to the table.

TipRanks analytics indicate TEVA as a Buy. Out of 11 analysts polled by TipRanks in the last 3 months, 5 are bullish on Teva stock while 6 remain sidelined. With a return potential of 15%, the stock’s consensus target price stands at $36.70.

Kite Could Soon Face Car-T Manufacturing Bottle Neck

If the chimeric antigen receptor (CAR) T-cell therapy sphere just received harmonious cheers from the FDA Oncologic Drugs Advisory Committee (ODAC), why is Maxim analyst Jason McCarthy suddenly stepping to the sidelines on Kite Pharma Inc (NASDAQ:KITE)?

Novartis’ CAR-T therapy Tisagenlecleucel-T (CTL019), designed to treat relapsed/refractory acute lymphoblastic leukemia (r/r ALL) receiving a 10-0 favorable vote that “the agency is comfortable (so far) with the risk/reward profile of the first CAR-T therapy” could generally be taken as a win for all CAR-T “first movers,” including Kite. In fact, not only does McCarthy see greater odds for Novartis to have a positive PDUFA date in October, but also believes Kite’s possibilities of gaining the ultimate FDA green light come November 29th are even higher.

The real question mark hangs over a $6 billion market cap, which has the analyst questioning that with “Kite already in the Mesosphere how much higher can it fly?” Therefore, the analyst downgrades from a Buy to a Hold rating on Kite stock while striking out his former price target of $88. (To watch McCarthy’s track record, click here.)

True, “We like Kite but we must consider what’s factored into the stock today…approval and success in relapsed/refractory (r/r) blood cancers,” explains McCarthy, but he cannot help wondering, “Will there be a CAR-T bottle neck in manufacturing? Some say yes, some say no but in reality we won’t have the answer until launch in 2018. Our model assumes a smooth launch (no manufacturing bottle neck) and >$1.0B in revenue by 2022 in the r/r blood cancers. However, even at a 15% discount rate (aggressive given that we would typically use a 30% discount for a company that does not yet generate revenue) our model points to a fully valued company. As such we believe it prudent to step to the side-lines […]”

Even with key CAR-T players including Juno, bluebird, and Novartis, the analyst sees a general oncological arena revolution at hand thanks to T-cell based therapies, and does not believe this momentum will be slowing. “However for Kite, at the current valuation of $6.0B, success in these initial indications is factored in today,” contends McCarthy, adding, “We expect eyes will shift now to not if, but when and how much: Commercialization.”

TipRanks analytics show KITE as a Buy. Based on 13 analysts polled by TipRanks in the last 3 months, 7 rate a Buy on Kite Pharma stock, 5 maintain a Hold, while 1 issues a Sell. The 12-month average price target stands at $90.63, marking a 12% downside from where the stock is currently trading.