William Blair Raises Pharmacyclics PT To $186 Following Imbruvica Contract

In a research report issued yesterday, William Blair analyst Y Katherine Xu maintained an Outperform rating on Pharmacyclics (NASDAQ:PCYC) with a price target of $186. The report follows a notice that the U.S. Department of Veterans Affairs (VA) posted last week announcing that it has awarded a contract to Pharmacyclics that could be worth up to $3.8 billion over five years to supply Imbruvica to VA patients.

Katherine said, “We believe that the contract with the VA is worth an additional $6 per share to our price target, after adding $1.5 billion in revenues to our model over the next five years. Currently, we have estimated in our model that Imbruvica will occupy about 50% market share of r/r CLL and r/r MCL over the next five years in the United States. Therefore, in a way we have already included in our model an estimated 50% of the VA patients. We are also assuming an 85% compliance rate and a 15% discontinuation rate for patients taking Imbruvica. As a result, we have added $1.5 billion in revenue to the U.S. revenue line over the next five years. This led to an increase in value per share of roughly $6.”

According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Y Katherine Xu has a total average return of 0.4% and a 50.0% success rate. Xu has a 0.6% average return when recommending PCYC, and is ranked #2241 out of 3298 analysts.



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