Chardan Capital’s Madhu Kumar believes Achillion Pharmaceuticals, Inc. ACHN is faced with several challenges, including lack of clinical data and presence of “competitive barriers” for targeted indications.
Kumar initiated coverage of the company with a Sell rating and price target of $4.
Lack Of Clinical Data
“Achillion is a clinical-stage biotechnology company focused on small molecule drugs for the complement and hepatitis C virus (HCV) therapy spaces, with clinical readouts expected in paroxysmal nocturnal hemoglobinuria (PNH) by end-2016 and in HCV in 3Q16,” the analyst mentioned.
Among the challenges facing Achillion Pharma is the fact that, while oral dosing of ACH4471 is favorable, there is absence of clinical data, which lowers the projected market share for the product in complement C5-mediated diseases (CMD).
In addition, the projections for C3 glomerulopathy (C3G), “while a unique opportunity for ACH-4471, are tempered by competition and lack of data,” Kumar noted.
The analyst stated that ACH-4471 was also in development for C3G, an orphan complement C3-mediated disease of progressive kidney failure.
Other Challenges
Kumar believes C3G represents a “potentially unique market opportunity,” with 2030 risk adjusted sales estimated at $1.46 billion. However, the indication only contributes an NPV of $0.48 per share due to the long horizon for it to start generating revenue.
On the other hand, Odalasvir is also not expected to meaningfully drive revenues in the HCV therapy space. Odalasvir is an NS5A polymerase inhibitor, which is in Phase IIa combination trials for HCV therapy.
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