Jefferies Reiterates Buy Rating on ARIAD Pharma (ARIA)

Jefferies & Company is out with a research report this morning, where it reiterates its Buy rating on ARIAD Pharmaceuticals

; it has a $6.00 price target on the stock. The Jefferies analysts said that the start of ARIA's Ph2 registration study of ponatinib is positive albeit expected, given strong efficacy data in 3rd-line CML/Ph+ALL and consultants' positive opinions. The next event is Ph3 data for ridaforolimus in advanced sarcoma in 4Q (by MRK); if positive, this would provide a significant upside to ARIA's current valuation/cash position. The analysts noted that “ARIA expects ponatinib global sales of ~$600M w/in 5 years of launch in 2nd/3rd-line CML/Ph+ ALL, ~1/2 of the current market for dasatinib (~$551M est. in 2010) and nilotinib (~$380M in 2010).” This assumes ponatinib pricing at slight premium pricing vs. dasatinib/nilotinib (annual Tx cost of ~$83K/~$89K, respectively). The analyst also note that the company's cash balance of ~$45M at YE10 is sufficient to get the company through 2H11, but may not be sufficient to complete the PACE trial.