Here’s Why William Tanner Says Corium International Inc (CORI) Long-Term Picture Stands Unchanged Despite Twirla CRL

Cantor's William Tanner believes the key fact of the matter is that Twirla does not use CORI's Corplex technology; the CRL just impacts the contraceptive patch manufacturer's short-term revenue prospects.


Corium International Inc (NASDAQ:CORI) shares took an 8% hit on Friday after Agile Therapeutics got an unfortunate letter no biotech player wants to get for the holidays: a second Complete Response Letter for Twirla, its low-dose combined hormonal contraceptive patch. Why does this impact Corium’s investor sentiment in a biotech-verse domino effect? Corium manufactures the Twirla patch.

Short-term, this may not look too ideal for Corium investors, who got skittish after the bad news was delivered Friday. Yet, will this setback be a game changer for Corium’s long-term opportunities?

Cantor analyst William Tanner says no, and notes that this “changes nothing” about his expectations for the healthcare stock down the line, believing that while this “may deprive COR of a near-term revenue opportunity,” the analyst’s bullish case for the long-term continues “intact.”

Therefore, the analyst maintains an Overweight rating on CORI stock with a $14 price target, which implies a nearly 36% upside from where the shares last closed. (To watch Tanner’s track record, click here)

Now assuming a pTS of 50% and pushing Twirla launch expectations back to the second quarter of 2019, the analyst reiterates his peak Twirls sales assumptions of $230 million in 2024.

What is “the most important thing to know?” Tanner explains, “The Twirla patch does not incorporate CORI’s Corplex patch technology. Rather, Twirla utilizes a technology that is distinct from Corplex. As a consequence, we see zero read-through to the fidelity of CORI’s Corplex technology from the FDA’s response in the Twirla CRL.”

Secondly, the analyst adds: “The FDA recently examined CORI’s manufacturing facility as part of routine inspection and a pre-approval inspection for Twirla. Issuance of form 483s, which occurred in the context of the CORI facility inspection, is not uncommon. As a consequence, we view the announcement as somewhat routine with the caveat that failure to correct can lead to more harsh responses from the FDA, e.g., issuance of Warning Letters. CORI management commented to us that their VAI (voluntary action indicated) status is unchanged.”

Thirdly, the analyst notes that whereas “AGRX hit a ‘snag’ in the adhesion testing, ostensibly because Twirla is a circular patch,” Corium’s rectangular donepezil patch is “unlikely” to fall prey to the same review obstacles.

TipRanks points to a strong bullish analyst consensus on Corium, with all 3 analysts polled in the last 3 months rating a Buy on the healthcare stock. With a return potential of 45%, the stock’s consensus target price stands at $15.00.

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