The iShares Nasdaq Biotechnology ETF (NASDAQ:IBB), which tracks 144 biotech and pharmaceutical companies, climbed nearly 3% today, four-day win streak, helped by some encouraging economic data ahead of the afternoon release of the Fed meeting minutes. Among the equities in focus are biotech companies Catalyst Pharmaceuticals Inc (NASDAQ:CPRX) and Cytokinetics, Inc. (NASDAQ:CYTK). Here’s a quick roundup of today’s brokerage notes on CPRX and CYTK.
Catalyst Pharmaceuticals Inc
Catalyst Pharmaceuticals shares tumbled nearly 37% today, after the company disclosed that it received a “Refusal to File” letter from the FDA regarding its New Drug Application (NDA) for Firdapse, an investigational drug candidate for the symptomatic treatment of Lambert Eaton myasthenic syndrome and congenital myasthenic syndromes.
In reaction, Piper Jaffray analyst Charles Duncan slashed the price target for the stock to $6.00 (from $10.00), while keeping his rating at Overweight.
Duncan commented, “We don’t believe the letter comments on clinical data submitted, and at this stage in reviewing the NDA for acceptance, the most likely feedback is a request for additional supportive information or a technical issue with the application. We also think the current political climate, with close public examination of orphan drug approvals and prices, may be contributing to a high level of scrutiny by the FDA, which is not a bad idea in the long run. We’d actually argue that a rigorous FDA process could represent a eventual positive for Firdapse in terms of competitive dynamics and franchise value. That said, we acknowledge the FDA letter probably delays timelines and introduces regulatory uncertainty.”
According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Charles Duncan has a yearly average return of -11.8% and a 26.3% success rate. Duncan has a -40.8% average return when recommending CPRX, and is ranked #3471 out of 3610 analysts.
As of this writing, all the 3 analysts polled by TipRanks still rate Catalyst stock a Buy. With a return potential of 691%, the stock’s consensus target price stands at $9.33.
Cowen analyst Ritu Baral reiterated an Outperform rating on shares of Cytokinetics, with a price target of $16, following the company’s fourth-quarter results and update on its clinical progress.
Baral wrote, “Recent highly positive Ph2 COSMIC CHF data from AMGN-partnered omecamtiv should trigger AMGN’s Ph3 go/no-go decision in the next 90 days, which would trigger a milestone to CYTK. We expect AMGN to opt-in after meetings with regulators in 2Q16. Ph3 tirasemtiv ALS trial data is on track for mid-2017 despite trial upsizing. Astellas-partnered CK-107 Ph2a COPD data is expected end of year 2016.”
According to TipRanks.com, analyst Ritu Baral has a yearly average return of 6% and a 37.6% success rate. Baral has a 20.7% average return when recommending CYTK, and is ranked #400 out of 3610 analysts.