Cantor Initiates Heron Therapeutics With Buy Rating, $41 Price Target

Cantor Fitzgerald’s Chiara Russo mentioned that with Heron Therapeutics Inc HRTX's lead product, Sustol, coming up for FDA approval, there was potential for a differentiated label that would cover both delayed and acute CINV (Chemotherapy-Induced Nausea and Vomiting).

The analyst initiated coverage of the company with a Buy rating and price target of $41.

Sustol Potential

According to the Cantor Fitzgerald report, “The CINV market is divided into four buckets of patients around two types of chemotherapy (moderately and highly emetogenic, or vomit inducing) and two stages of CINV prevention (acute or within 24 hours, and delayed within two to five days after chemo).”

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Sustol is a 5-HT3 antagonist, which Russo stated would “check all four of these boxes,” if approved, thereby offering differentiation, given that currently no approved treatments are available for delayed CINV for highly emetogenic chemotherapy.

Russo estimates Sustol sales at $350 million in 2021.

“Additionally, we like the marketing synergies of their second product candidate, HTX-019, also for CINV but with a different mechanism of action and enhanced safety profile, for which the company expects to file an NDA in 2H:16,” the analyst said.

‘Buy & Bill’ Reimbursement

Russo believes that the “Buy & Bill” environment currently impacting specialty pharmaceutical oncology products would help drive product adoption, while supporting premium pricing.

Although Sustol is unlikely to receive a J-code until January 2018, the analyst expressed confidence regarding reimbursement for physicians being built in other ways.

In addition, Russo expressed optimism regarding the HTX-011 product for post-operative pain.