Wedbush On Anacor Pharma: Crisaborole Delivers, We Reiterate Our Outperform

In a report rolled out Monday, Wedbush analysts David M. Nierengarten,Dilip Joseph and Robert Driscoll reiterated an Outperform rating on shares of Anacor Pharmaceuticals Inc ANAC, while boosting their price target from $85 to $190.

Shares of Anacor are up more than 55 percent on Monday trading.

Why Such A Surge?

Anacor's stock is surging on Monday, reacting to the release of top-line data from the company’s two Phase 3 trials for Crisaborole (AN2728). According to management, the compound met all primary and secondary endpoints in the studies conducted with patients suffering from mild-to-moderate atopic dermatitis (AD).

Following the strong results of the pivotal trials, the experts at Wedbush think Crisaborole will have a “relatively straightforward approval process.” They estimate the company can file an NDA some time in the first half of 2016, and launch de product before July of 2017.

Moreover, the analysts highlight that, holding roughly $190 million in cash and equivalents, Anacor counts with the resources to commercialize the drug on its own. They estimate sales could reach $350 million in 2017, and reach $2 billion by 2020.

The $190 price target is based on a multiple of the expected sales and royalties of Kerydin and Crisaborole in 2020, discounted back by 10 percent and 15 percent, correspondingly.

For fiscal 2015, Wedbush is modeling a net loss of ($1.14) per share; for fiscal 2016, the net loss is expected to fall to just ($0.01).