ChemoCentryx (CCXI) is on everyone’s radar Tuesday, with shares flying higher by more than 350% at one point. The ride was instigated by the positive results from the phase 3 ADVOCATE study of Avacopan, an oral 5a receptor inhibitor, used for the treatment of patients with anti-neutrophil cytoplasmic antibody-associated vasculitis (ANCA-associated vasculitis).
ANCA Associated Vasculitis (AAV) is a rare, grave, and often fatal autoimmune disease causing the destruction and inflammation of small blood vessels that can impact several different organ systems, and often involves the kidneys.
The crucial trial achieved both objectives of clinical remission at weeks 26 and 52 with statistical superiority of Avacopan over the standard of care at both time frames, and significantly higher at 52 weeks.
5-star H.C. Wainwright analyst Edward White was taken aback by the results, noting, “The superiority finding was a positive surprise. As a reminder, the company is planning to market avacopan on its own in the U.S., and it has already begun its plans, including senior level sales management hires. We believe a field force of MSLs and sales reps of about 50-75 people is appropriate in the U.S. ChemoCentryx expects to file an NDA in 2020, followed by an MAA filing also next year.”
Following the positive results, White reiterated a Buy rating on CCXI, while boosting his price target from $23 to $40. (To watch White’s track record, click here)
White commented, “The secondary endpoints’ data thus far look compelling and may be more important for commercialization of Avacopan. We anticipate Avacopan approval and launch in 2021 with sales of $29M in 2021 and $128M in 2022.” Following the positive data results, the analyst also increased the probability of success for Avacopan from 30% to 70%.
Although ChemoCentryx has only a few analysts currently throwing the hat in the ring, all are bullish on the stock. CCXI’s analyst consensus rating is a Strong Buy, with all 3 analysts giving it the thumbs up. The 12-month average price target stands at $29.50, which would have indicated much upside this morning, before the share price’s incredible rally, but now indicates a slight downside. This is partly due to the fact analysts have yet to update their ratings following the run up. In the coming days, though, it remains to be seen, whether CCXI can hold on to today’s massive gains. (See ChemoCentryx’s stock analysis on TipRanks)