Why This Analyst Remains Sidelined on Tetraphase (TTPH) Despite FDA Approval

Tetraphase’s (NASDAQ:TTPH) Auryxia just won the Food and Drug Administration (FDA) green light for treating patients with complicated Intra-Abdominal Infections (cIAI), but Needham’s Alan Carr believes the commercial opportunity for the drug is somewhat modest.

As such, Carr remains sidelined on TTPH shares with a Hold rating without suggesting a price target. (To watch Carr’s track record, click here)

Carr commented, “We estimate U.S. peak sales around $250M in 2030 (unch). We assume net sales per course of treatment of $1500, w/ 5% annual price increases (Average treatment duration 7-8 days). For context, Invanz generated $362M U.S. and $602M WW in 2017 (Merck) and Tygacil generated $358M WW in 2013 (Pfizer). Invanz and Tygacil patent protection in the U.S. ended in Nov 2017 and Apr 2016, respectively.”

“Xerava received a positive CHMP opinion on 7/27/18 and we expect the drug to be approved in Europe in Sept or Oct 2018. Tetraphase plans to market the drug independently in UK, Germany, France, Spain, and Italy. Mgmt has guided for launch in UK and Germany in 1H19, France in 2H19, and Spain and Italy in 2020. MSLs will be hired for all 5 countries in 2019, w/ sales reps added at time of launch. Tigecycline is more commonly used outside the U.S. and we believe interest in Xerava in Europe could be meaningful, particularly in southern Europe where MDR Gram-negative infections are most problematic. We assume peak sales around $80M in EU5,” the analyst added.

Most of the Street is far more confident than Carr’s sidelined stance, with TipRanks analytics showcasing TTPH as a Strong Buy. Based on 7 analysts polled in the last 6 months, 5 rate a Buy on Tetraphase stock while 2 maintain a Hold. The 12-month average price target stands at $6.83, marking a nearly 92% upside from where the stock is currently trading. See TTPH’s price targets and analyst ratings on TipRanks.

Tetraphase shares closed today at $3.52, up $0.10 or 2.92%.

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