Janney Capital Reiterates Buy On Agile Therapeutics Following Initiation Of Phase III Twirla Study

In a research note released today, Janney Capital analyst Kimberly Lee reiterated a Buy rating on Agile Therapeutics (NASDAQ:AGRX) with an $18 fair value estimate, following the company’s initiation of its Phase III Twirla study.

Lee wrote, “The company anticipates completion of patient enrollment within four to six months. As patients will be dosed for up to one year, we continue to expect top-line Phase III data in 1Q16, which remains consistent with the company’s previous update to us in June”. Lee added, “Management has indicated that it expects the Twirla launch to be a steady one given its market research. In addition, the company’s internal estimate for peak Twirla sales of $900+ million assumes conservative pricing below that of Mylan’s Xulane, a generic CHC patch. We conservatively estimate Twirla’s market share at 9% with drug pricing at a slight discount to a generic patch and currently branded oral contraceptives, which translates into $1.0 billion in peak sales. By comparison, Ortho Evra, the first contraceptive patch, garnered 10% market share 1.5 years after its launch and peaked at 11% share when it received a black box warning. Based on its distinguished profile, we believe Twirla can command greater market share and premium pricing to Xulane, which we view as upside to our estimates.”

Lee continued, “We do not expect any major catalysts for the rest of this year and believe investors should have a longer term investment horizon. We anticipate several important catalysts in 2015-2016 that should drive shares, namely Phase III Twirla data by 1Q16 followed by submission of a complete response in 1H16. We continue to expect a potentially favorable Phase III outcome as the regulatory pathway has been de-risked with a straightforward and simple study design, robust powering, an experienced clinical research organization and improved study conduct.”

According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Kimberly Lee has a total average return of 7.1% and a 51.4% success rate. Lee has a 17.7% average return when recommending AGRX, and is ranked #931 out of 3298 analysts.

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