Monday turned out to be a nightmare for shareholders of biotech companies Dynavax Technologies Corporation (NASDAQ:DVAX) and Puma Biotechnology Inc (NYSE:PBYI), as the stocks tumbled sharply in the wake of FDA rejection of Dynavax’s hep B vaccine, and new concerns regarding Puma’s breast cancer drug Neratinib. Let’s take a look and see what Cowen analysts have to say about these volatile events.
Dynavax Technologies Corporation
Dynavax shares are collapsing, down nearly 64% as of this writing, after the FDA has rejected the marketing application of Dynavax’s hepatitis B vaccine Heplisav-B. Currently, the company is pursuing financial partners to ensure the resources needed to advance Heplisav through the remaining approval process, and planning to maintain its efforts on the oncology programs.
While concerning, Cowen analyst Phil Nadeau still believes that Heplisav has a path forward, and with today’s weakness, “DVAX appears undervalued.”
Nadeau wrote, “Following cancellation of the VRBPAC meeting scheduled for November and consultation with our policy experts, a CRL for Heplisav was a real possibility, though we were hopeful that the FDA had all information required for evaluation by the December 15 PDUFA. Unfortunately the CRL will push Heplisav’s approval until late 2017, in the best case. Given that the FDA clearly has concerns (or at best questions) about Heplisav’s safety profile, there is certainly risk that it never gets approved. Management’s lack of additional information surrounding the nature and number of cardiac events makes it difficult to evaluate the strength of their association with Heplisav, and worries us the FDA may yet request yet another Phase 3 trial.”
According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Phil Nadeau has a yearly average return of 4.8% and a 51% success rate. Nadeau is ranked #628 out of 4209 analysts.
Out of the 4 analysts polled by TipRanks, 2 rate DVAX stock a Buy, while 2 rate the stock a Hold. With a return potential of 454%, the stock’s consensus target price stands at $23.67.
Puma Biotechnology Inc
Cowen analyst Chris Shibutani reiterated a Market Perform rating on shares of Puma Biotechnology, as San Antonio Breast Cancer Symposium (SABCS) abstracts renewed concerns on Neratinib’s tolerability profile, sending shares down nearly 20%. Neratinib is PBYI’s irreversible pan-HER inhibitor for treating early-state ad metastatic HER2 positive breast cancer.
Shibutani commented, “We see the SABCS abstract which indicates a higher than expected rate of Grade 3 diarrhea (27%), worse than the mid-teens rates from previous updates, as presenting primarily risks to the commercial prospects, not much from a regulatory standpoint, for neratinib. Whether the addition of Budesonide to the prophylaxis regimen can sustain mid-teens rates has become unexpectedly relevant.”
“We continue to expect that Neratinib will be approved in the extended adjuvant setting. The 5-year follow up data from the ExteNET study presented in July 2016, which demonstrated a sustained benefit for patients, is the lynch-pin underlying our view,” the analyst added.
As usual, we like to include the analyst’s trackrecord when reporting on new analyst notes. According to TipRanks.com, analyst Chris Shibutani has a yearly average return of 14.9% and a 79.5% success rate. Shibutani is ranked #322 out of 4209 analysts.
Out of the 8 analysts polled by TipRanks, 6 are bullish on PBYI, while 2 rate the stock a Hold. With a return potential of 94%, the stock’s consensus target price stands at $77.43.