In light of Cytokinetics, Inc.’s (NASDAQ:CYTK) second-quarter update, JMP Securities analyst Jason Butler remains bullish for the biotech company’s pipeline drug-paved road ahead. Butler reiterates a Buy rating with a price target of $17.00, marking a close to 53% increase from where the shares last closed. This price target includes representative upsides from pipeline drugs omecamtiv mecarbil, a cardiac-specific myosin activator created with the objective to help treat left ventricular systolic heart failure, as well as tirasemtiv, a pipeline drug designed as a potential treatment for people afflicted with ALS, a progressive neurodegenerative disease.
Cytokinetics just finished this fiscal year’s second quarter with a strong flourish, closing with about $98MM in cash. Butler credits these results to momentum from lower than expected operating expenses. Significantly, these numbers do not even include the upfront cash payment in the amount of $65MM announced Thursday, July 28, from an expanded partnership with Astellas, another biopharmaceutical company with headquarters in Japan.
Butler has his eyes on August for data on the development of tirasemtiv as well as towards the SPA for Amgen’s Phase 3 outcomes trial to prove it acceptable for FDA approval. Currently, all signs point to Butler’s optimism for Cytokinetics’ various drugs in steady development, which he views as positively on track. Butler elaborates on tirasemtiv’s phase 3 trial, “Management indicated that the values observed are more favorable than anticipated during the powering of the study. We look favorably toward this, as it suggests the trial is likely powered at a greater level than originally expected. In addition, an open-label, extension trial for patients who complete the Phase 3 trial will initiate in 4Q16.” For this analyst, Astellas purchasing an option to develop and own commercial rights to Tirasemtiv in Japan and various international countries is also going to prove to be a catalyst for Cytokinetics.
According to TipRanks, which measures analysts’ and bloggers’ success rate based on how their calls perform, Jason Butler is an over four-star ranked analyst, with a 51% success rate. Butler averages 30.6% in his annual returns.
TipRanks analytics show CYTK stock to be a Strong Buy. Consider that in the last 3 months, all 5 analysts polled rate a Buy for Cytokinetics. The average price target is $20.60, marking an 85% upside from where the stock is currently trading.
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