Analysts weigh in on drug makers Valeant Pharmaceuticals Intl Inc (NYSE:VRX), Synergy Pharmaceuticals Inc (NASDAQ:SGYP), and EXACT Sciences Corporation (NASDAQ:EXAS). While Valeant just hosted an investor event with its new CEO, Exact and Synergy both had data and drug trials featured at the Digestive Disease Week. Let’s take a closer look.
Valeant Pharmaceuticals Intl Inc
Following an investor presentation led by Valeant’s new CEO, Papa, Mizuho analyst Irina Rivkind Koffler remains bearish on the pharmaceutical company, unconvinced that it can make a comeback following a series of fraud allegations and pricing practice probes.
At the meeting, Papa noted that Valeant’s main offerings in dermatology, GI, and ophthalmology remain strong and that Valeant’s pipeline remains robust. Papa plans to expand Xifaxan’s indication to a broader population, which Koffler views as a “generally futile” initiative. Furthermore, Papa intends to “strengthen the company’s financial and managed care functions,” as well as “add more transparency around individual business units.” He aims to repay Valeant’s $1.6 billion debt this year.
Koffler explains that despite Papa’s grand plans, none of the updates are “really new,” leaving Valeant in an “extremely challenging predicament.” The analyst continues, “What is clear is that there are a number of divestitures ahead for the company that should lead to a lower top line in 2017.”
Despite these updates, Koffler reiterates an Underperform rating on Valeant with an $18 price target, marking a 33% downside from current levels.
According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Irina Rivkind Koffler has a yearly average return of 26% and a 57% success rate. Koffler has a 24.8% average return when recommending VRX, and is ranked #9 out of 3929 analysts.
Out of all the analysts who have covered Valeant in the past 3 months, 33% are bullish, 19% are bearish, and 48% are neutral. The average 12-month price target between these analysts is $46.20, marking a 72% potential upside from current levels.
Synergy Pharmaceuticals Inc
Plecanatide is Synergy’s pipeline drug being tested to treat chronic constipation and irritable bowel syndrome. Rodman & Renshaw analyst Raghuram Selvaraju weighed in on the company after the company presented additional Phase 3 data for plecanatide’s use in chronic idiopathic constipation (CIC) at Digestive Disease Week.
The data underscored the efficacy of the drug and supported the drug’s strong safety profile, exemplified with very low discontinuation rates. The FDA is currently reviewing the New Drug Application for plecanatide in CIC and will make a decision by the end of January.
The analyst explains, “From our perspective, this additional data on various secondary endpoints underscores the potentially best-in-class risk/benefit profile of plecanatide in the CIC indication and emphasizes what we view as the drug’s strong likelihood of approval early next year for this indication in the U.S.”
In light of the strong data recently presented, Selvaraju reiterates a Buy rating on the company with a $15 price target, marking an overwhelming 360% potential upside from current levels.
Is it worth listening to this analyst? Check Selvaraju’s historical performance and ranking Here.
According to TipRanks, all three analysts covering Synergy Pharma are bullish on the company with an average 12-month price target of $11.17, marking a 221% potential upside from current levels.
EXACT Sciences Corporation
Sean Lavin of BTIG weighed in on Exact Sciences this morning following data on Cologuard, the company’s at-home colon cancer screener. At this year’s Digestive Disease Week, several studies focused on Cologuard, leading Lavin to point to the product “as a guidepost to driving more successful colonoscopies.”
Lavin points to one study conducted by the Mayo Clinic that examined “the outcome of prior knowledge of a positive Cologuard test on the quality and yield of follow-up colonoscopies.” The test concluded that unblinded doctors spent 46% more time performing colonoscopies than blinded doctors. The analyst admits that the utility of the test comes down to the doctor, explaining, “One drawback for colonoscopies has been the variability of tests results, sometimes depending on endoscopist’s skill. We think incremental data showing the correlation of prior knowledge of a positive result and diagnostic yields enhances Cologuard’s value proposition to physicians.”
In the long run, the analyst believes that the Cologuard can pave the wave to setting a new industry standard. In light of this data, he reiterates a Buy rating on the stock with a $9 price target, marking a 60% potential upside from current levels.
According to TipRanks, Lavin has a 59% success rate recommending stocks with a 5.4% average return per rating. Out of the analysts who have rated the stock in the last 3 months, 38% are bullish on the company while 62% are neutral. The average 12-month price target is $8.19, marking a 45% potential upside from current levels.