Analysts Weigh in on Three Rising Healthcare Stocks: Palatin Technologies, Inc. (PTN), Novocure Ltd (NVCR) and AveXis Inc (AVXS)

Healthcare stocks Palatin Technologies (NYSEMKT:PTN), Novocure Ltd (NASDAQ:NVCR), and AveXis Inc (NASDAQ:AVXS) are reaping the benefits of clinical and corporate progress updates that have sent the companies’ shares climbing. Let’s take a look and see what analysts have to say about PTN, NVCR And AVXS.

Palatin Technologies

Palatin shares are rising 30% after the company’s key pipeline drug bremelanotide, designed to treat female sexual dysfunction (FSD), hit the co-primary endpoints in two Phase 3 trials for Hypoactive Sexual Desire Disorder (HSDD), indicating a statistically significant benefit compared to the placebo arm.

In Canaccord analyst John Newman‘s view, this is a “significant positive,” therefore reiterating a Buy rating on shares of PTN with a $6.00 price target, which represents an 843% increase from current levels.

Newman notes, “We await detail for the percentage of patients on treatment vs placebo that achieving clinically meaningful benefit, which should reinforce the bremelanotide benefit vs. placebo on both endpoints. Although the magnitude of benefit seems modest, the results were highly statistically significant. We remind investors that Palatin utilized the same clinical endpoints validated by the Addyi approval, which we believe greatly lowers regulatory risk.”

“We view the positive Phase 3 data for bremelanotide as a major positive, paving the way for FDA approval. Importantly, we do believe that there is a commercial market for bremelanotide, and do not believe that Addyi, with its highly restrictive prescribing requirements, represents the commercial potential for bremelanotide,” Newman contends.

As usual, we recommend taking analyst notes with a grain of salt. According to TipRanks, analyst John Newman is ranked #4,036 out of 4,173 analysts. Newman has a 26% success rate and faces a loss of 18.1% in his annual returns. When recommending PTN, Newman forfeits 30.2% in average profits on the stock.

Additionally, Joseph Pantginis of Roth Capital rates a Buy on PTN with a price target of $4.00, which represents a close to 535% increase from where the shares last closed.screen-shot-11-02-16-at-06-41-pm

Novocure Ltd

Novocure investors have a smile on their faces today, after the Israel-based device maker reported third-quarter financials and provided investors with a positive update on its clinical, commercial and reimbursement progress, sending shares up nearly 21%. Importantly, NVCR expects payment rates will increase as new payer contracts begin to take effect.

Subsequently, J.P. Morgan analyst Cory Kasimov reiterated an Overweight rating on NovoCure shares with a price target of $14, which represents a potential upside of 94% from where the stock is currently trading.

Kasimov noted, “Following a disappointing 2Q we are relieved to see some growth from Optune during the Q, though we note total prescriptions were still below the 1Q level. On the other hand, active patients have continued to grow (up 110% over 3Q15 and 11% vs. 2Q16) and we expect the reimbursement progress and continuing commercial push should continue to drive uptake. The launch of the smaller, 2nd gen device may also help; following the July approval of the device, 90% of US pts have made the switch. In addition, longer-term analysis from EF-14 (at SNO in Nov) and data in other tumor types (pancreatic and ovarian updates coming at the Dec 12th R&D day) will also be important in helping this novel treatment modality gain traction.”

The analyst concludes, “Though we continue to see meaningful commercial hurdles ahead of Optune we are encouraged by some of the progress made during the Q. We will be watching closely to see the impact of recent reimbursement wins, NCCN guidelines, as well as followup survival data from EF-14 later this year.”

As usual, we recommend taking analyst notes with a grain of salt. According to TipRanks, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Cory Kasimov has a yearly average loss of 15.3% and a 24.3% success rate. Kasimov has a 59.9% average loss when recommending NVCR, and is ranked #4026 out of 4173 analysts.

Out of the 4 analysts polled by TipRanks, 2 rate NovoCure Ltd. stock a Buy, 1 rates the stock a Hold and 1 recommends Sell. With a return potential of 80.6%, the stock’s consensus target price stands at $13.

AveXis Inc

AveXis shares are on an almost 23% surge after yesterday’s receipt of minutes from the September 30th Type B meeting with the FDA along with clinical updates detailing development plans for the firm’s pipeline drug AVXS-101, an AAV-based gene therapy designed to treat spinal muscular atrophy (SMA) type 1.

The firm had two announcements in particular that have Chardan analyst Gbola Amusa all the more confident and calling for upside to consensus estimates. First, the analyst points to the planned pivotal trial of AVXS-101, that possibly might commence in the first half of 2017. The study will have a single-arm design, using natural history of the disease as a comparator, and is set to enroll approximately 20 patients. Secondly, the analyst underscores the FDA’s assertion that they “strongly recommend” at the completion of the ongoing Phase I trial for AVXS to request an end-of-Phase 1 meeting, with the intention of discussing whether data is sufficient to “support” a marketing application.

On the heels of raising his probability of the AVXS-101 launch from 55% to 70%, Amusa reiterates a Buy rating on AVXS while boosting the price target from $65 to $85, which represents a 47% increase from where the shares last closed. The analyst notes a possibility to “step up” his launch timing assumption, currently estimated for 2020 upon a potential confirmation of a filing stemming from the ongoing Phase I trial.

The analyst opines, “Post FDA feedback to AveXis, a single-arm pivotal study is planned and is logical based on our understanding of what FDA likes to see in single-arm pivotal studies. We have heard bear commentary in the market that focuses on the potential for AVXS-101 to be tested against nusinersen in a pivotal study and previously believed this unlikely since, based on the data, regulators would potentially have an ethical dilemma in requesting the assignment of some infants to an unapproved drug (nusinersen) that has shown events, including deaths, and other infants to another unapproved drug (AVXS-101) that thus far has shown no events at the therapeutic dose.”

“To us, it would be even more unethical to test AVXS-101 against placebo, given the avoidable infant deaths that could occur; so, a logical outcome would be a single-arm pivotal study,” Amusa concludes.

AVXS-101 could be approved as early as the first half of 2018, and as the drug “dominates nusinersen,” the analyst remains bullish on the firm’s prospects moving forward.

According to TipRanks, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Gbola Amusa is ranked #3,961 out of 4,173 analysts. Amusa has a 39% success rate and loses 10.9% in his yearly returns. However, when suggesting AVXS, Amusa gains 38.6% in average profits on the stock.

TipRanks analytics demonstrate AVXS as a Strong Buy. Based on 5 analysts polled in the last 3 months, all 5 rate a Buy on AVXS. The consensus price target stands at $68.10, marking a 17% upside from where the stock is currently trading. screen-shot-11-02-16-at-06-41-pm

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