And we have a winner. After a long and arduous development process, only a few biotech names will emerge having attained the ultimate prize, an FDA approval. To get to this point, a company will need to successfully progress through several clinical phases of testing to ensure the product is both effective and safe.
Given that only a few key factors indicate its trajectory during the development stage, shares can be sent soaring rapidly in either direction on account of news regarding study results or regulatory approvals. This is because if a candidate ultimately receives approval, it often signals that sustainable revenues are on the horizon.
However, that’s not to say healthcare companies tap out on gains once they reach the finish line. Even after the FDA gives the all-clear, there’s still plenty of work to be done.
Taking all of this into consideration, we used TipRanks’ database to pinpoint two compelling biotech stocks whose products have just won FDA approval. Here’s what the analyst community has to say about these Buy-rated tickers.
Urogen Pharma (URGN)
Urogen is developing chemoablative agents for urological cancers using its cutting edge RTGel platform, which enables drug delivery to hard-to-reach anatomy as well as increases medication dwell time. With its recently-approved Jelmyto (UGN-101) therapy standing to change the treatment of low-grade upper tract urothelial carcinoma for the better, it’s no wonder the Street is excited.
Oppenheimer’s Leland Gershell points out that URGN “has infrastructure in place for a June 1 launch that will incorporate marketing strategies designed to accommodate COVID-19 restrictions.” This includes 48 sales reps which will cover curology practices that see 90% of the LG UTUC patient population. In addition, the company is deploying virtual-based detailing strategies, with a premixing service agreement already in place for point-of-care delivery of ready-to-use product.
Even though the company still hasn’t published the final durability data as some patients haven’t hit the twelve-month mark, Gershell sees a large re-treatment opportunity. “Given Jelmyto’s kidney-sparing profile, we view the prospect of re-treatment following tumor recurrence to be favorable to the alternative option of kidney removal. While retreatment data are currently lacking, URGN intends to begin a post-marketing study in this setting in the coming months,” he noted. To this end, the analyst estimates Jelmyto 2024E revenue in low-grade UTUC will hit $400 million.
On top of this, early clinical data for its other candidate, UGN-102, is promising. “We remain enthusiastic for UGN-102’s opportunity in low-grade non-muscle-invasive bladder cancer (NMIBC) following encouraging Phase 2b interim efficacy reveal, with Phase 3 on track to begin around year end,” Gershell commented.
Bearing this in mind, Gershell decided to stay with the bulls. Along with his Outperform call, the five-star analyst gave the price target a lift, from $45 to $47. This conveys his confidence in URGN’s ability to soar 100% in the next year. (To watch Gershell’s track record, click here)
Turning now to the rest of the Street, other analysts are on the same page. With 4 Buys and a single Hold, the word on the Street is that URGN is a Strong Buy. At $47.50, the average price target puts the upside potential at 107%. (See Urogen stock analysis on TipRanks)
Seattle Genetics (SGEN)
Using advanced antibody-drug conjugate technology, Seattle Genetics was able to develop a better way to deliver cancer-killing therapies to tumor cells. On the heels of its third commercial product approval from the FDA, one analyst tells investors not to miss out on this exciting biotech play.
Way before its August 20 PDUFA date, the regulatory agency gave SGEN’s TUKYSA (tucatinib) drug a thumbs up only four months after filing through the Real-Time Oncology Review (RTOR) program, which was the company’s second approval of this kind. TUKYSA was designed for use in metastatic HER2 positive breast cancer patients, including patients with brain Mets. It will be used along with trastuzumab (Herceptin) and capecitabine in patients who have already gone through at least one HER2 targeting therapy.
Writing for Needham, five-star analyst Chad Messer noted, “We find the rapid approval impressive, particularly with the challenges of the ongoing COVID pandemic, and is testament to the unmet need in this patient population.”
Messer goes so far as to say TUKYSA could become the standard of care in metastatic HER2 positive breast cancer as it was given a strong label for metastatic breast cancer (mBC), HER2 positive patients following progression on at least one anti-HER2 therapy. The label specifically states the therapy should be considered for brain Mets treatment, which differentiates it from other treatment options.
Expounding on the label’s implications, Messer said, “The approved label is broader than the patient population evaluated in HER2CLIMB, which included mostly 3rd-line patients.” He added, “The commercial organization to launch TUKYSA is already in place.” Additionally, the candidate could be approved for use in Europe, and is undergoing further testing that could potentially enable it to be used in earlier lines of therapy in mBC.
Based on all of the above, Messer left a Buy rating on the stock and bumped up the price target from $144 to $157. Should this new target be met, a twelve-month gain of 10% could be in store. (To watch Messer’s track record, click here)
Looking at the consensus breakdown, 10 Buys and 4 Holds add up to a Moderate Buy consensus rating. However, the $138.33 average price target implies a slight downside potential from current levels. (See Seattle Genetics stock analysis on TipRanks)
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