When looking at this week’s movers and shakers on the Street, Cantor analysts are backing their Buys on Oncomed Pharmaceuticals Inc (NASDAQ:OMED) and TherapeuticsMD Inc (NYSEMKT:TXMD) – even as these stocks took sharp nose dives yesterday. Oncomed investors were sent scurrying in the aftermath of a botched Phase II and ThyerapeuticsMD shareholders were not pleased to hear the FDA has questions that could delay the firm’s PDUFA date for its lead pipeline drug candidate. Let’s explore:
Expect Oncomed Shares to Be Weak
Oncomed shares were caught in an almost 37% freefall yesterday after the biotech firm was met with bad news for its Phase II YOSEMITE trial evaluating demcizumab in pancreatic cancer. The drug failed to meet its primary endpoint when juxtaposing the drug’s plus standard of care (SOC) to SOC, and also failed to mark improvement in median interim survival. Today, shares continue to drop close to 9%.
On the heels of the clinical failure, Bayer has revealed that its intent to license Wnt pathway inhibitors vantictumab and ipafricept is now off the table. However, Bayer will nonetheless participate in OMED’s small molecule program.
Despite the setback, Cantor analyst Mara Goldstein may spot share weakness ahead, but reiterates an Overweight rating on OMED with a price target of $16, which represents a 188% increase from where the shares last closed.
“We expect OMED shares to be weak based on the news that demcizumab in combination with standard of care in pancreatic cancer missed its Phase II primary endpoint. Given the lack of PFS and OS, Celgene’s advancement of the program is unlikely, in our view, which is also likely to weigh on the shares. Bayer has opted not to continue development of vantictumab and ipafricept, but will continue to participate in the small molecule program,” Goldstein surmises, noting that following the Phase II stumble, her price target is now under review.
As usual, we recommend taking analyst notes with a grain of salt. According to TipRanks, one-star analyst Mara Goldstein is ranked #3,838 out of 4,560 analysts. Goldstein has a 42% success rate and loses 1.3% in her annual returns. When recommending OMED, Goldstein forfeits 40.8% in average profits on the stock.
TipRanks demonstrate OMED as a Strong Buy. Out of 5 analysts polled by TipRanks in the last 3 months, 4 are bullish on Oncomed stock while 1 remains sidelined. With a return potential of 107%, the stock’s consensus target price stands at $11.50.
TherapeuticsMD: Skepticism Arises
Though TherapeuticsMD shares took a 19% plunge yesterday once word broke out on the Street that the FDA had sent a letter to the biotech firm that might put a hitch in PDUFA plans for estradiol VagiCap drug TX-004, designed to treat vulvar and vaginal atrophy (VVA) in postmenopausal women. While the drug originally had a PDUFA date set for May 7th, following the agency’s letter picking up on NDA deficiencies that preclude labeling and post-market discussions, Cantor analyst William Tanner now sees that as “unlikely.”
Though cautious on the stock’s short-term value, the analyst still sees reasonable chances for approval. As such, Tanner reiterates an Overweight rating on shares of TXMD with a $34 price target, which represents a 431% increase from where the stock is currently trading.
“We believe the FDA letter received last week may have deferred the reason to buy TXMD stock, at least over the near term, until there is a reset in the TX-004 May 7 PDUFA date. Given that discussions regarding labeling and post-marketing commitments are typically left for last, we wonder whether a delay could be related to questions that arose during the NDA review. Data submission late in a review cycle, in response to questions, can routinely trigger an extension. If there are no issues surrounding the clinical data, we believe approvability of the drug remains highly likely. We acknowledge that a short interest of ~40% in TXMD stock indicates, to us, that there is meaningful investor skepticism about the company’s potential to succeed in the development of its drug candidates. The FDA letter likely does nothing to quell that skepticism, in our view,” Tanner contends.
According to TipRanks, which measures analysts’ and bloggers’ success rate based on how their calls perform, four-star analyst William Tanner is ranked #1,059 out of 4,560 analysts. Tanner has a 54% success rate and realizes 7.3% in his yearly returns. When recommending TXMD, Tanner yields 1.8% in average profits on the stock.
TipRanks analytics show TXMD as a Strong Buy. Based on 6 analysts polled by TipRanks in the last 3 months, all 6 rate a Buy on TherapeuticsMD stock. The 12-month average price target stands at $20.00, marking a nearly 223% upside from where the stock is currently trading.