Clovis Oncology, FibroGen Are Key Biotech Names For Goldman Sachs

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In a report published Sunday, Goldman Sachs analyst Terence Flynn discussed the biotech space, noting the sector's most commonly referenced index, the NASDAQ Biotechnology NBI gained 28 percent year-to-date, drastically outperforming the S&P 500's 2 percent return over the same time period.

According to Flynn, the surge in the sector is attributed to the scarcity of growth, new product cycles and M&A activity. Looking forward to the near-term, the analyst stated that historically the second quarter is a "strong" quarter for large-cap biotech.

These are two stocks that are key biotech names for Goldman Sachs.

Adding Clovis Oncology To ‘Conviction List' On Pipeline Progress, M&A

Flynn added shares of Clovis Oncology Inc CLVS to Goldman Sach's "Americas Conviction List" given the assumption that Rocilentinib (Roci) will be approved for a subset of lung cancer in the first quarter 2016. In the near-term, the company is "on track" to complete its regulatory filing Monday morning.

Flynn added that he is "confident" the company can successfully move Roci into the front-line setting, where a Phase 2/3 trial is ongoing. In addition, the analyst is projecting peak sales of $2 billion in 2018 ($2.8 billion unadjusted), which assumes a probability of success in the 70 to 90 percent range.

Shares remain Buy rated with a price target lowered to $110 from a previous $116 given dilution from the recent secondary.

Upgrading FibroGen To Buy Following Sell-Off

Flynn upgraded shares of FibroGen Inc FGEN to Buy from Neutral with an unchanged $32 price target following the recent sell-off in shares which "does not appear tied to fundamentals."

FibroGen's lead asset, Roxadustat (Roxa) is an oral drug in Phase 3 development for the treatment of anemia due to chronic kidney disease. The analyst believes the drug has the potential to penetrate and expand the $8.6 billion injectable ESA market.

Flynn also pointed out the company is partnered with AstraZeneca plc (ADR) AZN in the United States and China, and ASTELLAS PHARMA INC ALPMY for the European Union and Japanese regions. The partnerships offer "independent validation" of its novel mechanism of action.

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Posted In: Analyst ColorBiotechPrice TargetAnalyst RatingsGeneralAmericas Conviction ListbiotechnologyGoldman SachsNASDAQ Biotechnology IndexRociRocilentinibRoxaRoxadustatTerence Flynn
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