Goldman Sachs Upgrades Anacor Pharma To Buy On 'De-Risked' Story

In a report published Tuesday, Goldman Sachs analyst Gary Nachman upgraded the rating on

from Neutral to Buy, while raising the price target from $60 to $195, even after the recent appreciation in the company's shares. "Our greater confidence in Crisaborole's outlook is supported by our recent conversations with two dermatologists, who believe the drug has promising data and a compelling profile," analyst Gary Nachman wrote. While the key differentiator is Crisaborole's strong safety profile, efficacy "looks good" too, Nachman said. In the report Goldman Sachs noted, "Use in atopic dermatitis (AD) should be significant, with one of the doctors expecting to use it front line in 80% of AD patients and another planning to start with 30% of AD patients and gradually increase to 50- 60%. The doctors also believe off label use could be significant in other types of dermatitis." Nachman mentioned that the market model had been revised and Crisaborole's peak sales were now forecasted at $1.7bn, assuming an 18 percent share of the AD market. Off label use would lend upside to this estimate. Nachman believes that momentum for Kerydin would also continue, based on "positive feedback from both dermatologists and upcoming DTC efforts." Peak sales for Kerydin is estimated at $800mn. "We now see ANAC as an even more attractive acquisition target with Crisaborole de-risked," the report stated, while adding that even after the surge in shares due to the effective R&D execution with the positive Ph3 data for Crisaborole, there seems to be "a very compelling reason to buy into the next phase of ANAC's execution."