If H.C. Wainwright analysts are right, a great deal of upside potential hangs in the balance for two biotech players: Synergy Pharmaceuticals Inc (NASDAQ:SGYP) and Agile Therapeutics Inc (NASDAQ:AGRX). With both companies approaching PDUFA dates with destiny, H.C. Wainwright is upbeat on chances for FDA approval, as Synergy eyes a green light in IBS-C and Agile is raring to hit the contraceptive patch market.
Will Label Extension Be a Rapid-Fire “Turning Point” for Synergy Sales?
Synergy is on track for a meaningful uptick in sales gains as far as H.C. Wainwright analyst Ram Selvaraju is concerned; especially if this drug maker secures a label extension for use in constipation-predominant irritable bowel syndrome (IBS-C).
In reaction, the analyst maintains a Buy rating on Synergy stock while trimming the price target from $8 to $7 to reflect the latest financing move. The new target implies a 280% upside from where the shares last closed.
Yet, despite the price target reduction, make no mistake; Selvaraju is a steadfast bull on Synergy’s opportunity ahead, anticipating that should label extension be within reach, “Synergy is likely to experience a significant acceleration in sales growth.”
Selvaraju highlights, “Since the new product blocks restricting formulary access for the first six months after Trulance market entry have now expired, we continue to believe that sales should be meaningfully increased in the final quarter of the year. However, we also anticipate that the bulk of acceleration in prescription growth should only occur after the IBS-C label extension occurs in January.”
Looking ahead to next year, the analyst angles for around $85 million in sales for Trulance.
A Confident Case Made for Agile to Score Approval for Twirla This Month
After Agile held its first analyst day, H.C. Wainwright analyst Oren Livnat now sees more confidence swirling around prospective FDA approval for weekly contraceptive patch Twirla by December 26th for its PDUFA date.
With stirred interest and receptivity seen in clinicians and patients like, even as the White House works against the Affordable Care Act’s contraceptive mandate, Livnat sees a “strong case” being made for Twirla’s approval to thrive in a managed care atmosphere that looks “favorable” for Agile’s patch.
As such, the analyst reiterates a Buy rating on AGRX stock with a $10 price target, which implies a just under 111% increase from where the shares last closed. (To watch Livnat’s track record, click here)
Livnat believes the company’s analyst day further shows this is a drug maker angling for approval. While Livnat sizes up the current stock price as a reflection of under 35% chance of approval, and this is taking under account probable dilution to follow after approval, the analyst is betting on 65% odds of approval. In fact, should Twirla be de-risked, Livnat’s discounted cash flow (DCF) model realizes $16 per share.
“Importantly, the company laid out its launch and market access strategy, with a reminder that the phased approach and heavy sampling means investors shouldn’t expect to see a material prescription ramp until 2H18. We think setting appropriate early expectations is smart. Agile’s commercial-focused event, in our view, signal’s the company’s confidence in approval,” writes the analyst, even as he acknowledges a certain amount of “investor skepticism” baked into the stock price.
However, key opinion leaders (KOLs) serve to “remind” Livnat that the weekly contraceptive patch’s Phase 3 mirrors the present-day mindset of the agency, and in other words, it is “likely” that Twirla is approvable. Moreover, the analyst dismisses the Pearl Index here as “not the most relevant effectiveness indicator” for Twirla’s Phase 3 efficacy, arguing that it is not wise to compare Agile’s asset against “much older contraceptive Phase 3’s.”
Livnat surmises on a bullish note for Agile as the drug maker approaches a green light from the FDA: “KOLs highlighted that real-world contraceptive effectiveness is clearly lower than old clinical trial efficacy and that FDA has no pearl-index approval cutoff […] Twirla’s life-table efficacy shows 95.8% efficacy through thirteen monthly cycles, which is strong, particularly given it included higher BMI/weight subjects than other trials (higher weight = less efficacy). That, and a better tolerability profile than most, makes for a compelling benefit-risk profile, in our view.”
With physicians like principle investigator for Tiwrla Dr. Kroll underscoring that women wished to remain on the patch following the clinical study and “a cadre of women waiting” to use Synergy’s asset, Livnat is placing his chips on the “pent up demand” seen for Twirla.