Paratek Pharmaceuticals Inc (PTRK) Well on the Way to Broad Market Opportunity Following Successful Phase 3 for Omadacycline


Paratek Pharmaceuticals Inc (NASDAQ:PRTK) shares rose by nearly 31% after the microcap acne medicine maker announced a positive top-line Phase 3 data readout for its lead antibiotic drug, Omadacycline in the indication of Community Acquired Bacterial Pneumonia (CABP). In reaction, Guggenheim analyst Louise Chen reiterates a Buy on PRTK shares with a target price of $38.00, which represents a substantial 104% upside compared to where the shares last closed.

“We believe Omadacycline is differentiated because, unlike many other new antibiotics in development that are being developed exclusively for the hospital, it will likely be used in the community as well because of its oral step-down option. We estimate Omadacycline peak sales of $1B+, compared to Street expectations of $100MM+. Based on current timelines, we expect Omadacycline approval (for CABP, ABSSSI and an oral-only dosing regimen for skin) at the end of ’18 and a launch in late ’18/early ’19. PRTK also plans to share ABSSSI oral-only Phase 3 data in 2Q17. We expect this data to be positive and further support the broad market opportunity for Omadacycline,” explains the analyst.

One step closer to getting the green light from the FDA, Paratek Pharmaceuticals is planning on submitting the NDA by the first quarter next year as well as submitting one in the EU, where the firm anticipates to find a collaborator.

Though the mortality rate circles just above 2%, the analyst remains unfazed. More importantly, the drug’s safety profile bolsters the analyst’s bullish perspective, “which enhances Omadacycline’s competitive advantage,” Chen concludes.

As usual, we recommend taking analyst notes with a grain of salt. According to TipRanks, a financial engine that measures and ranks analysts’ and bloggers’ performance, Louise Chen is ranked #4476 out of #4557 analysts. Chen has a 34% success rate and generates an annual yield of -14.9%. When recommending PRTK, the analyst earns a -4.1% average profit on the stock.

TipRanks analytics show PRTK as a Strong Buy. All 4 analysts offering recommendation on this stock in the last 3 months issue a Buy. The 12-month average price target stands at $33.67, marking a nearly 44% upside from where the stock is currently trading.

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