Will Teva Attempt to Block Lilly’s Launches?
There are four calcitonin gene-related peptide (CGRP) monoclonal antibodies (mAbs) under evaluation in Phase II and Phase II clinical trials for the first drugs on the market developed just to target migraine prevention.
Evercore ISI analyst Umer Raffat is out with a research note on Teva Pharmaceutical Industries Ltd (ADR) (NYSE:TEVA), one of the biotech players behind these CGRP mAbs, having just uncovered “a newly initiated lawsuit where Teva believes that other CGRP mabs like Lilly are infringing on its IP.”
For context, this will not mark the only time the topic has arisen, as Raffat explains, “As a reminder, this issue first came up in Europe when Lilly and Alder initiated opposition proceedings against Teva on the broad IP on CGRPs, and EPO ruled in favor of Teva.”
Right now, Lilly is the biotech rival baring the grunt of Teva’s wrath, and Amgen is presently unscathed in the CGRP mAbs arena. “Interestingly, we have NOT seen a lawsuit vs Amgen yet (even though Amgen has also filed the NDA). Some biotech specialists might point out that Amgen’s CGRP mab is aimed at the receptor instead … however, we note that Teva has at least one other patent (‘802) which seems to have a claim on receptor also: ‘1. A method for reducing incidence of … wherein the monoclonal antibody decreases CGRP biological activity of the CGRP receptor,'” writes the analyst.
Glancing ahead, Raffat contends, “In theory, Teva could attempt to block launches … but that’s certainly not our base case expectation. It is possible that all parties settle in the end. Having said that, we do believe this CGRP IP issue will get an increased amount of investor attention in coming weeks and months.”
Assessing the infringement and declaratory judgment lawsuit from a bullish viewpoint on Teva, the analyst maintains an Outperform rating on the stock with a price target of $38, which represents a just under 174% increase from where the stock is currently trading. (To watch Raffat’s track record, click here)
The Street is less convinced on the Israeli pharma giant’s prospects than Raffat, as TipRanks analytics exhibit TEVA as a Hold. Out of 19 analysts polled by TipRanks in the last 3 months, 2 are bullish on Teva stock, 14 remain sidelined, and 3 are bearish on the stock. With a return potential of 49%, the stock’s consensus target price stands at $20.71.
Ocular Boasts Compelling Risk/Reward Value
Ocular Therapeutix Inc (NASDAQ:OCUL) just gained a surge of confidence from Guggenheim analyst Adnan Butt, who believes Dextenza’s technology has a chance to enhance drug delivery for weary patient eyes, boding well on both a clinical as well as ‘real world’ standpoint.
Believing any manufacturing shortfalls will have short-term resolution and cheering that the drug maker’s target markets loom with massive potential, the analyst initiates coverage with a Buy rating on OCUL and a $12 price target, which implies a 106% upside from current levels. (To watch Butt’s track record, click here)
Butt comments, “OCUL’s lead drug candidates, Dextenza for post-surgery eye pain and inflammation (filed for approval) and OTX-TP for glaucoma (in Phase 3), address dosing and administration shortfalls of existing drugs used by millions of patients. We are also following the advancement of pre-clinical programs that prolong the activity of and reduce the dosing frequency of drugs for wet AMD and DME, which could add unanticipated optionality if successful. Next up are clarity on filing and approval timelines for Dextenza and Phase 3 data for OTX-TP in 2017/2018.”
Keep in mind the ineffectiveness of how many eye treatments exist on the market, argues the analyst, which gives Ocular’s technology the superior edge: “Daily administration of eye drops results in waste, over or under-dosing and imperfect compliance. OCUL’s depot technology allows a steady dose of drug to be delivered over weeks or months, eliminating peaks and valleys, and improves compliance and outcomes.”
Additionally, the analyst notes that Ocular’s Dextenza asset relies on two “commonly used” eye treatments, dexamethasone and OTX-TP travoprost, ideal on proven efficacy and safety as well as development risk fronts. Even more to the drug maker’s advantage, the analyst believes Ocular’s platform technology could stand on back of other drugs already in the market, opening the window to treating various eye disorders. With successful Phase 3 results underway for Dextenza, the analyst anticipates any manufacturing challenges will not derail the drug’s chances for approval, with an FDA delay a quick hold-up at most.
On an enthusiastic closing note, Butt looks ahead down a path of tremendous profitable potential: “Since OCUL’s drug candidates and platform technology could address millions of patients, we estimate addressable markets sum up to billions in dollar terms.”
Wall Street sees a great deal of promise in this biotech player, considering TipRanks analytics indicate OCUL as a Strong Buy. Based on 4 analysts polled by TipRanks in the last 3 months, 3 rate a Buy on Ocular stock while 1 maintain a Hold. The 12-month average price target stands at $14.33, marking a 148% upside from where the stock is currently trading.