Steadymed (STDY) Lands Price Target Boost from H.C. Wainwright Following Big Legal Sweep for Trevyent


There were cheers from Steadymed (NASDAQ:STDY) investors last Friday following The Patent Trial and Appeal Board’s (PTAB) favorable decision granted to the biotech firm in its Inter Partes Review (IPR) case against rival United Therapeutics’ (UTHR), which found UTHR’s 22 claims for the ‘393 patent unpatentable. In reaction to the news, shares were sent soaring 29%.

Analyst Andrew Fein of H.C. Wainwright likewise takes part in the bullish parade, welcoming the decision as further reason to be confident on the stock’s prospects. As such, the analyst reiterates a Buy rating on shares of STDY while raising the price target from $10 to $15, which represents a 100% increase from where the stock is currently trading.

Fein notes, “UTHR’s key product-by-process treprostinil patent was a weak IP barrier, providing ample opportunity for competitors like SteadyMed to attack and win. We believe that the verdict also highlights an important point for the biotech industry broadly: in the recent string of biotech IPRs, it is clear that the IPR process is becoming less of a frivolous nuisance and more of a legitimate form of IP challenge with time and cost benefits for a smaller cap biotech company.”

For the analyst, the patent win is meaningful, as it provides STDY with a “path to commercialization” and removal of “a key layer of legal risk” circling their leading drug candidate Trevyent, designed to treat pulmonary arterial hypertension (PAH) using PatchPump technology.

Moreover, “The unambiguous win from last week (all 22 claims unpatentable) gives us confidence that a joiner IPR (a new IPR immediately following an old IPR with possibility for the same panel) should yield a similarly favorable outcome for STDY. If that does occur, we believe the burden that befalls STDY is primarily one of time (recall IPRs are relatively inexpensive). The entire IPR process takes on average 18 months, which would potentially delay Trevyent launch by a few months until early 2019,” contends Fein.

Looking ahead, the analyst anticipates an NDA submission forthcoming for the second quarter of 2017, which coupled with a strategic “legal win in hand” drives him to model a higher probability of success for commercial Trevyent, lifting from 66% to 80%.

According to TipRanks, which measures analysts’ and bloggers’ success rate based on how their calls perform, four-star analyst Andrew Fein is ranked #474 out of #4,557 analysts. Fein has a 48% success rate and realizes 9.9% in his annual returns. When recommending STDY, Fein yields 42.7% in average profits on the stock.

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