Loxo Oncology Inc (NASDAQ:LOXO) gave investors cause to celebrate today, to the tune of shares rocketing 26%, after providing an encouraging regulatory update for its pipeline of targeted kinase inhibitors, which includes its lead candidate LOXO-101 larotrectinib. For top analyst Eric Schmidt at Cowen, the biotech firm has made such strides that he firmly sings its praises, joining today’s bullish parade, reiterating an Outperform rating on shares of LOXO without suggesting a price target.
Schmidt posits, “We are encouraged that Loxo has been able to enroll ‘many dozens’ of TRK-fusion patients into the pivotal Phase II NAVIGATE trial and that this study is now ~85% enrolled. We also place importance on Loxo commentary that the activity observed in NAVIGATE is similar to the reported Phase I experience, and that CNS responses have been observed. While there had been indications that Loxo might be able to use NAVIGATE to file for a broad label covering all tumor histologies, we are pleased that management has been able to confirm such a strategy. This will be particularly important given that over 10 tumor types are represented in NAVIGATE.”
Looking ahead, the analyst models a 2019 launch for the pipeline drug with expectations for first year sales to circle $3MM. Additionally, contingent upon an NDA filing by the close of 2017 coupled with a priority review, the analyst finds it entirely within reach for LOXO for larotrectinib’s initial sales to jump-start come 2018.
Ultimately, “Loxo has committed to a larotrectinib NDA for patients with TRK-fusions regardless of tumor histology in late 2017/early 2018. We are highly impressed by the breadth, depth, and duration of responses to larotrectinib, and believe the drug has $500MM+ in commercial potential,” Schmidt contends, recognizing a future full of promise for the firm.
As usual, we like to include the analyst’s track record when reporting on new analyst notes to give a perspective on the effect it has on stock performance. According to TipRanks, top five-star analyst Eric Schmidt has achieved a high ranking of #93 out of 4,283 analysts. Schmidt upholds a 52% success rate and garner 18.8% in his annual returns. When recommending LOXO, Schmidt earns 7.6% in average profits on the stock.
Additionally, Kennen MacKay of Credit Suisse rates a Buy on LOXO without listing a price target, Christopher Marai of Oppenheimer rates a Buy with a $30 price target, Stephen Willey of Stifel Nicolaus rates a Buy with a $36 price target, and Yigal Nochomovitz of Citigroup rates a Buy with a $25 price target.