In a research report released Monday, Brean Capital analyst Jonathan Aschoff maintained a Buy rating on Heron Therapeutics Inc (NASDAQ:HRTX) and raised the price target to $45 (from $40), which implies an upside of 36% from current levels. The increased price target follows recent meetings with Heron management and common themes were a competitive advantage for all of its drugs, and a rapid pace through the clinic for HTX-019 and HTX-011.
Aschoff observed, “Sustol should be approved by mid-January 2016 and would be launched no earlier than early April 2016 for reasons described below. Sustol should have a superior label to its closest peers based on the recently successful Phase 3 trial, and should afford community oncologists the most attractive net cost recovery of any 5HT3 receptor antagonist. Sustol’s formulation patent expires in 2024, but within two years an improved formulation should be approved and have about 20 years protection.”
Furthermore, “Over 2H15, we expect Phase 2 bunionectomy results, followed by Phase 2 hernia results, both with HTX-011. We view HTX-011 as a truly long duration controlled release of bupivacaine which should be able to beat both placebo and generic bupivacaine in registration trials. HTX-011 will also be tested in many surgical settings to support as broad a label as possible. HTX-019 needs only a bioequivalence trial to infused Emend, given its 505(b)(2) development pathway, and a long-term stability evaluation, teeing it up for an NDA filing in 2H16 and a 2H17 approval.”
Bottom line, “The next 18 months or so for Heron comes with a density of catalysts that we believe will be positive, given that they are all unified by what we view as a powerful and adaptable Biochronomer technology, and we therefore are raising our target price.”
According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Jonathan Aschoff has a total average return of 12.8% and a 55.5% success rate. Aschoff has a 144.3% average return when recommending HRTX, and is ranked #157 out of 3724 analysts.