Puma Biotech Is Wounded, But May Have Claws: J.P. Morgan

• The share price of Puma Biotechnology, Inc. PBYI has decline more than 53 percent, year to date, after having achieved a peak of $249.71 in March.
• JP Morgan’s Cory Kasimov has initiated coverage of Puma Biotechnology with an Overweight rating and price target of $122.
• Kasimov believes that following the unjustified sell-off in the stock, the potential rewards now outweigh the risks at the current valuation levels.

According to the JP Morgan report, there are several events scheduled through 2H15 that could offer more clarity on the “ultimate direction of shares,” most important of which are the three-year update on the Phase 3 ExteNET study and the Phase 2 Imodium prophylaxis data.

Kasimov believes that “while there are certainly some outstanding questions around approvability/market opportunity… meaningful upside from current levels can be generated with what we consider to be relatively conservative assumptions.”

Kasimov also believes that the negative sentiment generated by the ExteNET data was overdone, since this data was not “a true representation of neratinib’s benefit-risk profile.” Additional data from the study is expected at the time of NDA submission, which is scheduled for 1Q16.

“By then, we should have Phase 2 FB-7 data in neoadjuvant, Phase 2 data featuring Imodium prophylaxis, and the 3-year ExteNET update. Altogether, these disclosures could help shape a different clinical profile than what ExteNET showed in Chicago,” the report added.

Kasimov expects neratinib to be able to reach worldwide peak sales of $2 billion for breast cancer alone.