Stocks in the biotech sector are notoriously volatile pending pending FDA approvals and new drug trials. Analysts weigh in on ACADIA Pharmaceuticals Inc. (NASDAQ:ACAD) and Galena Biopharma Inc (NASDAQ:GALE) following positive feedback from FDA Panel for ACADIA’s Parkinson treatment, and positive phase 3 clinical trial for Galena’s NeuVax.
ACADIA Pharmaceuticals Inc.
ACADIA shares jumped 24% in pre-market trading after the FDA AdComm for ACAD’s pimavanserin voted heavily positively (12-2) on the drug’s risk/benefit profile, supporting near-term approval of the drug for PDP as the May 1 PDUFA date approaches.he
In reaction, Needham analyst Alan Carr reiterated a Buy rating on the stock with a price target of $49, which represents a potential upside of 68% from where the stock is currently trading.
Carr commented, “The FDA Psychopharmacologic Drugs Advisory Committee voted yesterday 12-2 in favor of Nuplazid approval for treatment of Parkinson’s Disease Psychosis. Although FDA clinical reviewer P. Andreason made clear his serious concerns with Nuplazid risk/ benefit profile, ODE I Deputy Director R. Temple appeared more open-minded. The vote creates a path to approval, which we expect to occur by 5/1/16 PDUFA date. Discussion around Boxed Warning was inconclusive, with some members advocating against one.”
“Committee members generally viewed Nuplazid as effective, with a few expressing disappointment that effect size was not larger. We note, however, Parkinson’s disease specialist J. Duda was ‘happy to take this risk-benefit profile’ and voted ‘Yes’ on all questions. Around half of committee specifically called for some form of postapproval commitment, ranging from surveillance programs to observational studies, but nothing particularly onerous,” the analyst added.
According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Alan Carr has a total average return of 11% and a 44% success rate. Carr has a 30% average return when recommending ACAD, and is ranked #201 out of 3828 analysts.
All the 12 analysts polled by TipRanks rate ACADIA stock a Buy. With a return potential of 116%, the stock’s consensus target price stands at $51.45.
Galena Biopharma Inc
FBR analyst Vernon Bernardino reiterated an Outperform rating on shares of Galena, with a price target of $5.00, after the company announced its 758-patient PRESENT Phase III study with NeuVax to prevent recurrence in early-stage node-positive breast cancer reached the 70th qualifying disease-free survival (DFS) event.
Bernardino commented, “We believe the news confirms PRESENT is on track to reach an interim analysis readout of safety and study futility in 2Q16. We remind investors that 78% of subjects were disease free and alive at 24 months in the NeuVax Phase II trial (p = 0.04, HR = 0.00). We note that PRESENT has a high likelihood of low observer variability, as the events will be centrally adjudicated by an independent committee comprised of two oncologists and a radiologist with significant expertise in the conduct of clinical trials in breast cancer. Thus, we look for the interim PRESENT results to be positive and robust, significantly de-risking the final readout when the study reaches the 141 events in 2018. With the stock trading near the lows of its 52-week price range, we think the stock is trading at very attractive levels and would be buyers ahead of the interim analysis in 2Q16.”
According to TipRanks.com, analyst Vernon Bernardino has a total average return of -24.5% and a 25% success rate. Bernardino has a -20.5% average return when recommending GALE, and is ranked #3749 out of 3828 analysts.