The iShares Nasdaq Biotechnology ETF (IBB) is poised to open higher on Friday, boosted by Federal Reserve Chair Janet Yellen’s positive comments on the economy. Among the equities in focus today are Relypsa Inc (NASDAQ:RLYP), Juno Therapeutics Inc (NASDAQ:JUNO), and Intercept Pharmaceuticals Inc (NASDAQ:ICPT). Below, analysts provide some quick thoughts on these names.
BTIG analyst Tim Chiang reiterated a Buy rating on shares of Relypsa, with a price target of $45, after Reuters reported that the biotech firm is exploring a sale following a number of overtures from potential buyers.
Chiang opined, “We believe potential suitors for the Co. could include larger drug Co.’s like Merck, Sanofi, and Galenica. The key product at Relypsa is Veltassa which was approved in October 2015, and launched in the US on Dec.21. With Veltassa patent protected until 2030 via composition of matter patents, we believe the product has a lengthy runway for sales growth, with our peak sales estimate of ~$750 to $800 million estimated by 2025. We believe it would not be unreasonable to think that a potential suitor could pay $45 – $50 per share for Relypsa in the current market. That would peg an enterprise value of ~$1.8 – $2B for the Co. We would note that last November, AstraZeneca acquired ZS Pharma for $90 per share (or $2.7B in cash) for their new hyperkalemia treatment, ZS-9, which has a May 26 FDA action date.”
According to TipRanks.com, which holds analysts accountable for what they write by tracking how their stock picks perform over time, analyst Tim Chiang has a yearly average return of 10.6% and a 60% success rate. Chiang has a 47.5% average return when recommending RLYP, and is ranked #430 out of 3854 analysts.
Out of the 13 analysts polled by TipRanks, 12 rate Relypsa stock a Buy, while 1 rates the stock a Sell. With a return potential of 63%, the stock’s consensus target price stands at $39.58.
Juno Therapeutics Inc
FBR analyst Edward White weighed in on Juno Therapeutics after the cancer-drug maker announced that it has formed a new company with WuXi AppTec, a China-based CRO, called JW Biotechnology (Shanghai) Co. Ltd, which aims to develop and commercialize CAR and TCR therapies in China.
White noted, “We are encouraged to see Juno making arrangements to penetrate the Chinese market where over an estimated 2.5 million people die each year from cancer. We think that having an experienced partner in China could give Juno a competitive advantage over other ex-China based CAR T companies trying to penetrate the market. However, we do note that Juno’s therapies will be quite expensive so we will be interested to hear more about how JW Biotechnology plans to make CAR T and TCR therapies accessible in China.”
The analyst rates Juno Therapeutics’ stock an Outperform, with a price target of $73, which implies an upside of 79% from current levels.
According to TipRanks, analyst Edward White has a yearly average return of 1.9% and a 53% success rate. White has a -3.6% average return when recommending JUNO, and is ranked #1425 out of 3780 analysts.
As of this writing, all the 5 analysts polled by TipRanks (in the past 3 months) rate JUNO a Buy. With a return potential of 62%, the stock’s consensus target price stands at $66.25.
Intercept Pharmaceuticals Inc
Finally, Wedbush analyst Liana Moussatos reiterated an Outperform rating on shares of Intercept Pharma, with a fair value estimate of $423, following the news that the FDA Gastrointestinal Drugs Advisory Committee voted yesterday 17-0 in favor of Intercept’s Ocaliva approval for treatment of Primary Biliary Cirrhosis (PBC).
Moussatos commented, “Overall, GIDAC members believed that additional longer term data needed for detailed treatment recommendations could be obtained in the ongoing Phase IV confirmatory trial (COBALT) […] On the safety front, the FDA cited no major safety concerns at the proposed approval doses.”
The analyst continued, “With a cash balance of about $628 million at the end of 2015, we believe the company is well capitalized for initial launch […] We continue to project gross peak annual sales could reach $2.2 billion. We speculate that interest in Intercept as an acquisition target could heat up after OCA is approved.”
According to TipRanks, analyst Liana Moussatos has a yearly average return of 9.6% and a 39% success rate. Moussatos has a 21.5% average return when recommending ICPT, and is ranked #234 out of 3780 analysts.
Out of the 17 analysts polled by TipRanks, 12 rate Intercept Pharmaceuticals stock a Buy, 4 rate the stock a Hold and 1 recommends a Sell. With a return potential of 37%, the stock’s consensus target price stands at $224.09.