Biotech Beat: Analysts Weigh in on Endo International plc – Ordinary Shares (ENDP) and Galena Biopharma Inc (GALE)

Analysts recently weighed in on two healthcare stocks Endo International plc – Ordinary Shares (NASDAQ:ENDP) and Galena Biopharma Inc (NASDAQ:GALE). While one analyst decreased his price target for ENDP due to uncertain growth outlook, the other shines light on Galena’s interim analysis for its key treatment NeuVax. Let’s take a closer look:

Endo International plc – Ordinary Shares

Morgan Stanley analyst David Risinger slashed his price target from $50.00 to $15.00 on Endo International due to the “wake of painful reset.” The analyst reiterates a Hold rating on the stock, and explains that financial outlook for the company remains uncertain, while further noting the company’s lack of a clear strategic vision.

Risinger proceeds to elaborate on the significant decrease in price target, attributing the causes to three major factors. First, the analyst brings forward the issue of execution disappointments in the company’s base business. Second, Risinger emphasizes the issue of generic pricing uncertainty and continued weakness in Qualitest, Endo’s operating company. Third, Risinger draws attention to high debt load and financial liabilities, which he mentions will likely “continue to burden the equity.” Risinger notes, “We have a wide bull/bear range. Endo shares are likely to remain in the investor “penalty box” near term; we see upside to the stock’s multiple if execution improves and downside if cash flow disappoints given high debt leverage.”

The analyst further comments on uncertain growth outlook in the company’s generics sector as well as its key brands. Risinger explains, “Although Par’s pipeline remains intact with significant 4Q:16 launches (Seroquel and Zetia), these are short duration profit assets which will likely face significant competition after 180 days.”

Additionally, Endo’s 505(b)(2) pipeline may be overshadowed by competitor Vasostrict, according to Risinger. However, the analyst notes that “good news for Endo is that API for Vasostrict could be a barrier to entry through at least 2017 and mgmt. is looking to add a patent, so we do not currently modeling competition in our estimates.”

To conclude, the analyst comments, “At a high level, we believe the company lacks a clear path forward.”

According to TipRanks, Risinger’s prediction succeeded 60% of the time, ultimately delivering a one-year average return per recommendation of 1.5%. ENDP currently holds an average analyst consensus of Moderate Buy, with 36% of analysts bullish, 57% of analysts neutral, and 7% of analysts bearish. The average price target for the stock is $40.23 with an upside of 186.33%.

Galena Biopharma Inc

Galena Biopharma is currently advancing in interim analysis of its key pipeline, NeuVax, a product aimed at treating cancer of epidermal growth factor receptor (HER2). The drug is currently going through Phase III trial, PRESENT (Prevention of Recurrence in Early-Stage, Node-Positive Breast Cancer with Low-to-Intermediate HER2 Expression with NeuVax Treatment).

In light of this, FBR Analyst Vernon T. Bernardino provides speculation regarding supporting trends in favor of NeuVax as a stock catalyst.

Bernardino notes that the potential upside from NeuVax, a “significant near-term milestone” is undervalued. He explains the interim analysis of safety and futility expected in 2Q:16 is expected to be positive and “transformative” for the company, elaborating further that the interim should result in “lowered risk for NeuVax’s progression through late stage testing.”

The analyst remains ambitious towards the completion of the study, with hopes that the Independent Data Monitoring Committee (IDMC) will ease the process. Bernardino recalls, “in March 2016, PRESENT reached the 70th qualifying disease-free survival event, which is defined as a recurrence of breast cancer (BC), occurrence of another cancer, or death from any cause. Recall also that this interim analysis is a prespecified look at safety and futility on the first 70 adjudicated events and will evaluate the probability of the study to achieve its prespecified objectives.”

He explains further, “We expect the IDMC will recommend PRESENT “keep going,” and although a low probability, we think any observation that hints at NeuVax activity could be a major catalyst for the stock.”

The analyst understands that the upcoming IDMC interim review may result only in a comment on the safety and futility of NeuVax treatment. However, he remains optimistic that an encouraging remark may not only accelerate PRESENT, but other pipelines as well. He explains, “positive IDMC recommendation also has the potential to provide insight into the 300-patient combination study in node-positive, HLA A2+/A3+ BC. In particular, we think a positive IDMC recommendation for PRESENT’s continuation could point to a similar conclusion (a safety look is expected in late 2016) that the HLA A2+/A3+ BC combination trial indicates positive trends and should also continue.”

Bernardino reiterates an Outperform rating on GALE with a price target of $5.00.

According to TipRanks, Bernardino’s prediction succeeded 20% of the time, ultimately delivering a one-year average return per recommendation of (-22.4%). GALE currently holds an average analyst consensus rating of Strong Buy, with 3 analysts offering bullish recommendations. The average price target for the stock is $4.67 with a 262% upside.


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