Portola Pharmaceuticals Inc (PTLA): Oppenheimer Lowers Price Target Amid Apprehension Circling AndexXa’s Approval Timeline

Oppenheimer's Jay Olson still sees 106% return potential for PTLA shares after dialing back the price target.

Portola Pharmaceuticals Inc (NASDAQ:PTLA) shares are taking a rapid 23% plunge with fears hanging in the air over AndexXa: the FDA is looking for further data on patients taking the reversal agent for Xa inhibitor anticoagulants. Does this spell a delay for the drug getting the green light from the agency?

Following yesterday’s fourth quarter update, the further randomized trial data for the drug is transfixing the conversation on Wall Street. Even Oppenheimer analyst Jay Olson acknowledges that this new “FDA communication introduces AndexXa uncertainty.”

In reaction, the analyst reiterates an Outperform rating on PTLA stock while cutting the price target from $72 to $67, which implies a 106% upside from current levels. (To watch Olson’s track record, click here)

“We believe the most likely scenario would be requirement of a randomized AndexXa trial post-approval, based on FDA’s previous agreement to this plan in 2015. We are curious about the feasibility of conducting a randomized trial and suspect that is why the FDA originally agreed to an open-label uncontrolled study (ANNEXA-4) to be compared to a usual care cohort,” writes the analyst.

Overall, “It’s not clear whether a randomized trial would be required pre-approval or as a post-approval commitment. Details will emerge over the course of continued discussions with the FDA, according to management. If a randomized trial is required prior to FDA approval, we estimate that would delay the potential US launch of AndexXa from 2Q18 until late 2020. Although we believe the most likely scenario is a post-marketing study following 2Q18 approval, we are lowering our probability of success for AndexXa to 75% (from 85%) as we await further details,” Olson argues, looking for this month’s ANNEXA-4 update at ACC to hopefully “restore” investor faith in both AndexXa’s efficacy as well as its safety.

Additionally, the analyst is reassured to see last week’s positive trend vote from the CHMP, bolstering his conviction in AndexXa’s prospects for approval.

TipRanks highlights a confident camp rooting for PTLA on Wall Street- which means many bulls are wincing as shares crash today in the market. Out of 6 analysts polled in the last 3 months, 5 are bullish on PTLA stock with just 1 playing it safe on the sidelines. With a return potential of nearly 84%, the stock’s consensus target price stands at $58.60.

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