Analysts weighed in on biopharmaceutical stocks Horizon Pharma PLC (NASDAQ:HZNP) and Ariad Pharmaceuticals, Inc. (NASDAQ:ARIA). While Horizon recently acquired additional rights to one of its leading drugs, Ariad caught a sneak peak of the anticipated ASCO meeting, which released data on its brigatinib medicine. See how analysts rated these sought-after stocks.
Horizon Pharma PLC
Dublin-based pharmaceutical company Horizon Pharma’s key drug, Actimmune, is aimed at treating Friedreich’s ataxia (FA), a degenerative neuro-muscular disorder. While the pharmaceutical company already has rights to Actimmune in the US, Canada, and Japan, Horizon just recently formed a new deal that may drive company success to new heights.
In light of recent progressions for Horizon, UBS analyst Marc Goodman reiterated a Buy rating on the company with a 12-month price target of $24.00.
Goodman noted, “Management is clearly excited about the FA indication, and it looks like it would like to lock up particularly Europe, a potentially large market for FA, and mgt believes it would get a better deal before the STEADFAST trial readouts.”
Further, the analyst explains that if FA works, the European market can surpass $200 million, which Goodman comments “would make the BI deal very cheap.”
Additionally, the deal would allow management to gain control of manufacturing for Actimmune, which Goodman mentions is “something that it wanted for a while, to modernize it and improve efficiencies moving forward as well as scale up for a global supply in FA.”
According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Marc Goodman has a yearly average return of 1.9% and a 56.4% success rate. Goodman has a -14.2% average return when recommending HZNP, and is ranked #1249 out of 3929 analysts.
Horizon has an analyst consensus rating of Strong Buy, with a whopping 89% of analysts bullish and 11% neutral. All recommendations amounted to a 12-month average price target of $30.43, marking a 100% upside from where shares last closed.
Ariad Pharmaceuticals, Inc.
On May 18, 2016, The American Society of Clinical Oncology (ASCO) released abstracts from its annual meeting, set to take place June 3-7. The abstracts included the first data release from the ALTA trial of Ariad’s brigatinib medicine in refractory ALK and non–small-cell lung cancer (NSCLC).
In light of this, William Blair analyst Y. Katherine Xu reiterated an Outperform rating on ARIA with a price target of $10.00. Xu explains, “The data supports a competitive profile of brigatinib, potentially differentiating the compound in depth of response as well as duration of response, and activity in the central nervous system (CNS).”
The analyst explains two different doses were tested during the ALTA study. Of the two, researchers used objective response rate (ORR) and progression free survival (PFS) to find the higher dose demonstrated better efficacy. The drug’s ORR and complete response (CR) rates in patients appear to have tested better than competitor drug Alecensa, and was on par with competitor drug Zykadia. Xu explains, “The ALTA data so far demonstrate brigatinib’s ORR at 54% with CR at 5%. Although a drop from the 72% ORR observed in the Phase I/II study (exhibit 1), it is on par with Zykadia, which at ASCO 2015 showed an ORR of 55% and CR of 4% (on its label, Zykadia’s CR is listed at 1%). Alecensa’s labeled ORR and CR remain below the competition at 44% and 0%, respectively.”
Additional ORR and PSF data, as well as more data in CNS metastases will be presented at the upcoming ASCO meeting. In regards to this, Xu takes on an optimistic outlook and believes the results may “further set brigatinib apart from the competition.”
According to TipRanks.com, Xu’s prediction succeeded 44% of the time, ultimately delivering a one-year average return per recommendation of 2.7%.
ARIA has an analyst consensus rating of Moderate Buy, with 60% of analysts bullish, 20% neutral, and 20% bearish on the stock. All recommendations amounted to a 12-month average price target of $9.60, marking a 23.87% upside from where shares last closed.