Valeant’s Good News- Manufacturing Qualms Could Be Put at Rest
Valeant Pharmaceuticals Intl Inc (NYSE:VRX) has revealed the FDA’s confirmed intention to issue a Voluntary Action Indicated (VAI) inspection classification for its Tampa, Florida Bausch & Lomb manufacturing facility.
From Cantor analyst Louise Chen‘s standpoint, this is an amazing win for the troubled biotech giant, as she anticipates this will facilitate approval of new drugs from this Bausch & Lomb facility. It’s simply “hard to ignore all the positive developments coming out of VRX,” cheers Chen, who is out with a bullish research note on the giant’s comeback to good graces on the Street.
Of the new drugs that could be approved, the analyst points to Valeant’s glaucoma candidate, explaining, “One of these products is Vyzulta, for the treatment of glaucoma, which recently received a CRL. Valeant plans to provide more information on this opportunity when it is able to do so, which could be soon, according to the company.”
In reaction to the VAI inspection buzz, the analyst reiterates an Overweight rating on shares of VRX with a $23 price target, which represents a just under 63% increase from where the stock is currently trading. (To watch Chen’s track record, click here)
This is a key step that could unlock confidence for Valeant investors, as the analyst highlights, “With this confirmation, manufacturing uncertainties related to current and upcoming regulatory submissions should be eliminated for products manufactured at the Tampa facility. Valeant expects this to facilitate its current and upcoming regulatory submissions of products manufactured at the facility. As further evidence of the progress made at the Tampa facility, the company received approval on Aug. 15 for a Supplemental New Drug Application for the facility to be a release-testing facility for drug substance for Alaway (ketotifen fumarate ophthalmic solution), 0.035%.
Ultimately, “We think Vyzulta has the potential to be a blockbuster drug for VRX and could drive upside to sales and earnings expectations for the company,” contends Chen.
TipRanks analytics demonstrate VRX as a Hold. Based on 13 analysts polled by TipRanks in the last 3 months, 3 are bullish on Valeant stock, 7 remain sidelined, and 3 are bearish on the stock. With a return potential of nearly 21%, the stock’s consensus target price stands at $17.08.
Immunomedics Right on Track
Immunomedics, Inc. (NASDAQ:IMMU) shares were falling 3% yesterday after delivering its fiscal fourth quarter financial print, but Cowen analyst Phil Nadeau is content with the biotech firm’s “steady” strides with its metastatic triple negative breast cancer (mTNBC) drug IMMU-132. From Nadeau’s assessment, it appears the drug is “on track” for a Biologics License Applications (BLA) submission by the end of this year or the start of the first quarter of 2018.
As such, the analyst maintains an Outperform rating on IMMU with a price target of $15, which implies a close to 93% increase from where the stock is currently trading.
Nadeau notes, “Management suggested that the work on the critical path is mostly around the validation of the commercial manufacturing process and most prominently the production and conjugation of IMMU-132’s linker and toxin. IMMU noted that all of the work is routine, and that similar work has been completed by its team and contractors a number of times before for other FDA filings. The FDA’s guidelines are clear, and IMMU and its contractors are completing the necessary tasks. IMMU has described the work as ‘blocking and tackling’ that simply takes time to complete.”
“Manufacturing is rate limiting for IMMU-132’s filing in mTNBC. With steady progress, […] IMMU expects to release updated results from ‘132’s Ph. II during H2, likely at SABCS, with the first patient to enter the confirmatory Ph. III early in Q4. We continue to think that IMMU is significantly undervalued for ‘132’s potential,” concludes the analyst.
For the fiscal fourth quarter, IMMU posted a net loss of $53.3 million, or $0.48 in EPS. The net loss factors in $25.5 million of non-cash charges correlated with the surge in fair value of the warrant liability as well as roughly $10 to $12 million in nonrecurring charges from the proxy battle coupled with management severance. The biotech firm left June with cash and equivalents totaling $154.9 million, which the IMMU management team indicates will be sufficient to fuel operations through September of next year. Throughout the next two years, the firm has 21.5 million “in-the-money” warrants outstanding that will expire, and therefore are anticipated to bring in an extra cash boost of around $90 million. Nadeau projects that thanks to the additional cash generated, IMMU should have enough to fund operations heading into 2019.
TipRanks analytics exhibit IMMU as a Buy. Based on 2 analysts polled by TipRanks in the last 3 months, both rate a Buy on Immunomedics stock. The 12-month average price target stands at $12.00, marking a 54% upside from where the stock is currently trading.