Esperion Therapeutics Inc (NASDAQ:ESPR) and Nektar Therapeutics (NASDAQ:NKTR) are skyrocketing with a fury today on back of major clinical strides forward that have investors today eagerly watching these needle-movers ascend up through the stratosphere. Between the FDA’s support for ESPR’s program in bempedoic acid as well as Nektar’s stellar Phase 3 results in chronic low back pain, analysts are applauding these biotech players, with one taking a positive step up to the sidelines and two hiking the price targets. Let’s take a closer look:
Esperion Has Rocked the Street with Exciting FDA News
Esperion investors have sent shares surging 70% after the FDA gave a vote of confidence for the firm’s LDL-C lowering program, deeming it sufficient to garner approval of an LDL-C lowering indication for bempedoic acid. Across the Street, investors are out singing the praises of Esperion, between upgrades and considerable price target boosts, embracing the firm’s gilded path lying ahead.
In reaction, Credit Suisse analyst Vamil Divan sees fit to no longer be bearish on the firm’s prospects, upgrading from an Underperform to a Neutral rating on ESPR with a $29 price target, which represents an approximately 28% downside from where the stock is currently trading.
Though the analyst is not bullish quite yet, unsure how the doctors will take to prescribing the drug, he is optimistic on the firm’s clinical potential.
“With FDA clarity obtained, the key for ESPR now becomes successful completion of the Phase 3 studies by mid 2018. Based on the Phase 2 data for the product, we are optimistic the Phase 3 data will be positive. Our base case includes a probability of success assumption of 80%. We do still wonder what the appetite will be for doctors to prescribe the drug before seeing positive outcomes data given its novel mechanism of action. However, as an oral, once-daily and relatively cheap alternative, we believe there should be reasonable interest from payers and providers for using the drug in patients not controlled with or intolerant to statins and/or ezetimibe. Positive outcomes data will ultimately be critical in allowing the drug to gain significant market share. The longer duration of follow up in CLEAR Outcomes is also encouraging in that regard and should allow for positive outcomes results, in our view,” Divan asserts.
According to TipRanks, which measures analysts’ and bloggers’ success rate based on how their calls perform, five-star analyst Vamil Divan is ranked #355 out of 4,560 analysts. Divan has a 64% success rate and realizes 11.4% in his annual returns. However, when recommending ESPR, Divan faces a loss of 18.6% in average profits on the stock.
Needham analyst Chad Messer likewise is riding the bullish train on the firm’s exciting prospects, reiterating a Buy rating on shares of ESPR while more than doubling the price target from $25 to $58, which represents a 44% increase from current levels.
“The FDA has agreed that the Phase III CLEAR LDL program of bempedoic acid is sufficient to support approval. This resolves a long standing issue for ESPR shares regarding the ability to get their drug approved without a completed CVOT. This regulatory confirmation comes on the heels of the positive FOURIER outcomes data for Repatha and the genetic validation of the target for bempedoic acid which was presented yesterday at the American College for Cardiology (ACC). As a result of this trifecta of positive news we are increasing our price target on ESPR to $58 from $25. We once again model US approval based on CLEAR LDL in 2020,” Messer surmises.
TipRanks analytics demonstrate ESPR as a Buy. Out of 7 analysts polled by TipRanks in the last 3 months, 4 are bullish on Esperion stock and 3 remain sidelined. With a return potential of nearly 1%, the stock’s consensus target price stands at $39.00.
Nektar’s Chronic Low Back Pain Drug Could Become a ‘Savior’ to FDA
Nektar shares are rising 43% after the firm released Phase 3 results for its SUMMIT-07 trial in patients with moderate to severe chronic low back pain. Not only did the drug exhibit “powerful efficacy,” significantly reducing pain in patients, but the drug was very “well-tolerated,” gleaming with the “low abuse potential.”
From the eyes of Roth Capital analyst Michael Higgins, these results were highly “impressive” and far better than initially anticipated. As such, the analyst reiterates a Buy rating on NKTR while raising the price target to $31, which represents a 40% increase from where the shares last closed.
The analyst cheers, “Nektar released impressive Phase 3 results with NKTR-181, its NCE full muopioid agonist molecule designed to slowly release across the blood-brain-barrier. We’re seeing strong market reaction this morning, which we attribute to the Phase 2 ‘miss,’ but more so because the results were unequivocal. We expect mgt will now enter into negotiations to out-license ‘181 while meeting with the FDA on this Fast Tracked drug.”
“In its licensing efforts, we expect Nektar will be successful in leveraging the horrific epidemic of opioid abuse, as NKTR-181 can become a ‘savior’ of sorts to the FDA as it continues to wage a media campaign over its actions to address an epidemic it overlooked for too long. Strange as it may seem, Purdue (private) is our lead as the most likely acquirer of ‘181, with Pfizer (PFE-NC), Horizon (HZNP-NC) and Mallinckrodt (MNK-NC) more likely to pay reasonable fees to acquire ‘181,” Higgins concludes.
According to TipRanks, Michael Higgins is ranked #4,435 out of 4,560 analysts. Higgins has a 33% success rate and loses 13.2% in his yearly returns. However, when recommending NKTR, Higgins gains 8.3% in average profits on the stock.
TipRanks analytics exhibit NKTR as a Strong Buy. Based on 4 analysts polled by TipRanks in the last 3 months, all 4 rate a Buy on Nektar stock. The 12-month average price target stands at $20.75, marking a nearly 3% downside from where the stock is currently trading.