Analyst Thomas Yip of FBR & Co is Bullish on biotech companies Peregrine Pharmaceuticals (NASDAQ:PPHM) and Cerus Corporation (NASDAQ:CERS). The analyst remains positive on both due to pipeline developments and a massive recent agreement, respectively.
Thomas Yip, analyst at FBR & Co, weighed in on Peregrine and reiterated his Outperform rating on the biopharmaceutical company following FY3Q16 results. Peregrine has a strong portfolio of cancer treatments and diagnostic agents in its pipeline and is “anticipating [a] new Immuno-oncology clinical path for Bavituximab to emerge in 2016.”
Peregrine reported that it is “currently evaluating the specific designs of two previously planned clinical trials of a bavituximab/durvalumab combination in collaboration with AstraZeneca.” These clinical trials deal with agents utilized to treat non-small cell lung cancer (NSCLC). While Peregrine has pushed back initial date expectations, Yip “[considers] progress in either planned clinical trial (a Phase II NSCLC trial and a Phase I solid tumor trial) as an incrementally positive step to redeem bavituximab’s value.”
Peregine management also provided updates on Avid Bioservices, a manufacturing subsidiary of the company. Yip stated, “Avid’s growth continues, with Peregrine now expecting FY16 12-month revenue to exceed $40M (previous guidance was $35M–$40M).” Avid recently completed an expansion of its manufacturing facility and now possesses substantially expanded manufacturing capabilities. The analyst stated, “this increased capacity will ensure Avid’s fulfillment of $58M in committed manufacturing contracts within the next 15 months and also supports Avid’s continued growth as a manufacturer of late Phase III clinical and commercial biologics.”
According to TipRanks, Yip has a success rate of 33% and an average loss per rating of 28.3%. The 12-month average price target for PPHM is $2, marking a 365.12% upside from where shares last closed. Out of the 3 analysts who have rated the company in the past 3 months, 2 gave a Buy rating while 1 remains on the sidelines.
Yip also weighed in on Cerus in light of breaking news from the company regarding major milestones in their agreement with Blood Centers of America (BCA). Cerus is a biomedical products company focused mainly on blood safety.
The company announced the news of its 5-year agreement to be the preferred supplier for BCA, “an organization of over 50 independent blood products suppliers representing over 30% of the U.S. blood supply.” This is a key development for Cerus due to BCA’s massive role in the industry, with BCA members annually distributing more than 632,000 platelet and 1,000,000 plasma units to 2,000 hospitals.
Under the terms of this agreement, “BCA will actively promote INTERCEPT for platelets and plasma to its members and commit to implementing INTERCEPT for at least 50% of its aggregate production volume over its member centers.” INTERCEPT is an innovative blood safety device developed by Cerus. Yip stated, “BCA’s commitment to implement INTERCEPT with a significant volume target is another positive sign that U.S. blood suppliers are beginning to recognize INTERCEPT’s logistic and financial benefits.”
According to TipRanks, 6 analysts have rated Cerus in the past 3 months, with 5 providing a Buy rating and 1 remaining neutral. Cerus has a 12-month average price target of $8.25, marking a 45.76% upside from where shares last closed.