Cowen Sees Array Biopharma Inc (ARRY) Share Weakness as Attractive Despite NDA Loss
Array Biopharma Inc (NASDAQ:ARRY) shares are dipping almost 8% after the discouraging news broke that the biotech firm has decided to withdraw its NDA for for binimetinib monotherapy, designed to treat NRAS-mutant melanoma.
Yet, one analyst’s calamity is another’s buying opportunity. For Cowen analyst Chris Shibutani, this recent share pressure shines as the latter- an “especially attractive” one at that. As such, the analyst recommends investors act accordingly, and he reiterates an Outperform rating on shares of ARRY while reigning in the price target from $15 to $14, which represents a 43% increase from where the stock is currently trading.
Shibutani notes, “We see minimal to no material implications for the company’s opportunity in BRAF mutant melanoma. While successful approval of Binimetinib for NRASmutant melanoma would have presented the opportunity for the company to initiate steps along the path of becoming a commercial entity, it was mostly a question of when, not if. Importantly, in the weighing of pros/cons given this situation, we see the company as now being able to position their commercial efforts from a position of strength.”
Ultimately, “We see ARRY’s decision to withdraw the NRAS NDA as prudent given the known modest efficacy benefit. The NRAS-mutant melanoma opportunity represented a modest 6% of our base model DCF, thus we lower our PT modestly from $15 to $14. We view recent share weakness and the passing of this ‘risk’ event as an especially attractive opportunity to firmly reiterate our Outperform rating on ARRY shares,” Shibutani concludes.
According to TipRanks, which measures analysts’ and bloggers’ success rate based on how their calls perform, five-star analyst Chris Shibutani is ranked #248 out of 4,560 analysts. Shibutani has a 70% success rate and garners 33.2% in his yearly returns. When recommending ARRY, Shibutani gains 34.2% in average profits on the stock.
TipRanks analytics show ARRY as a Buy. Out of 6 analysts polled by TipRanks in the last 3 months, 4 are bullish on Array stock while 2 remain sidelined. With a return potential of nearly 21%, the stock’s consensus target price stands at $12.00.