Key FDA Decisions Could Power These 3 Biopharma Stocks

Today, we list 3 biopharma companies that have FDA events approaching along with positive analyst sentiment. In other words, analysts expect these companies’ stock prices to appreciate as they draw closer to their respective catalysts. Let’s take a closer look at Kala Pharma (NASDAQ:KALA), TherapeuticsMD (NASDAQ:TXMD), and Antares Pharma (NASDAQ:ATRS).

What to Expect Ahead of Kala August 24 PDUFA

Biotech investor anticipation will be high on Friday, August 24, where Kala’s Inveltys will be in the spotlight. The company should receive feedback from the FDA regarding its NDA and, if approved, Inveltys is targeted to be the first FDA-approved ocular corticosteroid with 2x/day (BID) dosing for the treatment of inflammation and pain following ocular surgery. Meanwhile, Kala is growing its commercial infrastructure as it prepares for the launch of Inveltys and is generating physician and payor feedback as it develops its pricing and contracting strategies.

Wells Fargo analyst David Maris is taking a bullish stance noting, “We like this product and believe that its approvability is high […] Using a well-known steroid that is already approved in postsurgical ocular pain and inflammation leads us to believe the regulatory and commercial risks are lower than average for an NDA for Inveltys, as the FDA and doctors are already familiar and comfortable with the safety and efficacy of the active drug within this indication […] We estimate Inveltys will generate $25mm in revenue in 2019E, growing to $345mm in 2025E.”

As such, Maris rates the stock an Outperform, with a price target of $19.00, which implies an upside of nearly 60% from current levels.

Worthy of note, about 73% of Kala’s shares are owned by institutions and mutual funds. It is a good indicator, since institutional investors (a.k.a. the “smart money”) have access to sophisticated research and have a great deal of information on the companies they trade.

TherapeuticsMD: TX-001HR Review Ahead of October PDUFA

TherapeuticsMD is eyeing an FDA action date October 28, where all eyes will be on the company’s TX-001HR, designed to treat patients with moderate-to-severe vasomotor symptoms due to menopause. If the drug is approved, TXMD hopes to launch the drug as early as Q1 2019. The company reiterated TX-001HR’s potential to take over a very large opportunity in the bioidentical estrogen plus progesterone market that appears to comprise more than 20MM TRx in the U.S. annually.

J.P. Morgan analyst Chris Schott stated, “We see TX-001 capturing significant share in the separate estrogen and progesterone market. As likely the first FDA-approved bioidentical combination estrogen (E) + progesterone (P) product, TX-001 will provide a single pill solution to millions of women experiencing vasomotor symptoms as a result of menopause. This appears particularly appealing to women using separate E and P products as TX-001 combines the two most commonly prescribed E+P hormones and eliminates the risk of progesterone non-compliance (which significantly increases patient risk). We forecast TX-001 converting ~50% of the ~3.8 mm TRx market (translating to an opportunity of ~$350+ mm) […] Overall, we forecast ~$25 mm in sales for TX-001 in 2019, rising to $132 mm in 2020 and ~$250 mm in 2021 with peak sales expected to reach >$750 mm.”

Net net, Schott reiterates an Overweight rating on TherapeuticsMD shares, with a price target of $11, which implies an upside of 102% from current levels.

Antares: Xyosted FDA Action Looming

It’s been a long road for Antares investors. On October 20, 2017, Antares received a CRL from the FDA regarding the NDA for XYOSTED (QuickShot Testosterone), which identified two deficiencies. The FDA was concerned that XYOSTED could cause a clinically meaningful increase in blood pressure, and it also raised concerns regarding the occurrence of depression and suicidality. During a Type A meeting on February 21, 2018 the company met with the FDA to discuss a resubmission plan in response to the CRL. Notes were provided to the company in late March, after which the company prepared and submitted the necessary documents and information. The FDA considered the resubmission to be a complete, Class 2 response and determined a September 29, 2018 PDUFA date.

Jefferies analyst Anthony Petrone opined, “With the targeted PDUFA now less than 2 months away timing suggests that FDA has no intentions of convening a BRUDAC adcom meeting to aid in its decision on the XYOSTED NDA. This is a positive sign but caveated given last year’s CRL experience. That said, this go around feels more de-risked given a short CRL review period by FDA (4 days), inclusion of a blood pressuring monitoring study with the resubmission, and better clinical data than orals.”

Petrone maintains a Buy rating on Antares shares, with a price target of $5.00, which represent a potential upside of 58% from today’s closing price.

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