Yesterday, the FDA approved Verastem’s (VSTM) lead product, Copiktra (duvelisib), as the first PI3K-δ/-γ inhibitor for the treatment of third-line chronic lympocytic leukemia (CLL), small lympocytic leukemia (SLL), and follicular lymphoma (FL).
In reaction, H.C. Wainwright analyst Swayampakula Ramakanth reiterates a Buy rating on Verastem shares, while boosting the price target to $15 (from $10), which represents a potential upside of 96% from where the stock is currently trading. (To watch Ramakanth’s track record, click here)
Ramakanth commented, “Not unexpectedly, the FDA has included a boxed warning highlighting the increased risk of serious infections, diarrhea, and colitis with Copiktra. However, as we have previously noted, according to the study investigators these adverse events are similar to those found with other CLL therapies and can be managed through prophylactic treatments using antibiotics and G-CSF. Following approval, management has announced that Copiktra will have a list price of $11,800 per month and will be available to patients immediately. Currently, we expect Copiktra to generate revenues of $178M for these three indications by 2025.”
“Following the approval of Copiktra in the US, we have removed the regulatory risk-adjustment for Copiktra for the treatment of CLL, SLL, and FL. Furthermore, we have adjusted the pricing of the drug to match the announced list price and moved up the launch of Copiktra to 4Q18 from 1Q19. As the result of these changes, we now project Copiktra to achieve risk-adjusted revenues of $216M across all indications by 2025, up from $127M previously,” the analyst added.
Net net, Wall Street is overwhelmingly putting its chips behind this drug maker, as TipRanks analytics exhibit VSTM as a Strong Buy. Based on 6 analysts polled in the last 3 months, all 6 are bullish on Verastem’s stock. The 12-month average price target stands at $15, marking a nearly 100% upside from where the stock is currently trading. (See VSTM’s price targets and analyst ratings on TipRanks)