Why Does Credit Suisse Like Portola Pharma?

In a report issued Wednesday, Credit Suisse analysts Vamil Divan and Muriel Chen assumed coverage of Portola Pharmaceuticals Inc PTLA with an Outperform rating and $51 target price, on the back of an appealing emerging cardiovascular franchise.

The analysts see the company as a high-class emerging biopharma player, as it counts with two promising late-stage assets in the cardiovascular arena and “an early-stage asset that could provide upside in cancer.”

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According to the research note, Betrixaban's pharmacokinetic profile and early data gives the experts confidence in its successful potential in the blood clot prevention market for acute medically ill patients. The FDA has designated its factor Xa inhibitor antidote andexanet alfa as a Breakthrough Therapy.

This makes its likeliness of being approved for use as “a reversal agent for betrixaban as well as market leaders Xarelto and Eliquis,” very high.

Finally, early data (from a phase 1 dose escalation trial) for the dual JAK/SYK inhibitor cerdulatinib is encouraging. However, the analysts “acknowledge that development and commercialization of that product will be a challenge in the increasingly competitive hematological oncology space.”

Risks & Catalysts

Credit Suisse mentions two risks and four catalysts to take into account before investing in PortolaPharmaceuticals.

Investment risks include:

1) Portola’s clinical-stage status implies the firm does not expect to see profitability on a continuing basis until 2017. “Unanticipated clinical or competitive setbacks with betrixaban or andexanet alfa could significantly impact PTLA’s outlook,” they add.

2) “Slow manufacturing and commercial progress for andexanet alfa.”

Upcoming catalysts include:

1) The Part 2 of ANNEXA-R data with Xarelto, expected before August.

2) Phase 2 data for betrixaban reversal, expected for some moment before March 2016.

3) A filing for andexanet alfa BLA, also expected for February-March 2016.

4) Data for betrixaban’s Phase 3 trial, expected some time between March and August of 2016.