Wedbush Raises TESARO Price Target From $107 To $139

Waltham, Massachusetts-based TESARO, has an approved product in Varubi (rolapitant) for the prevention of delayed nausea and vomiting associated with emetogenic chemotherapy. The company is also developing its Phase 3 asset, niraparib, a PARP inhibitor in ovarian and breast cancer indications.

TESARO said it would file NDA and MAA for all patients with recurrent, platinum-sensitive ovarian cancer in the fourth quarter 2016.

"[W]e see the lack of requirement for a companion diagnostic for niraparib in these patients as a potential advantage over competing PARP inhibitors," analyst David Nierengarten wrote in a note.

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Nierengarten, who expects niraparib to be launched in the United States in mid-2017, now assumes 50 percent peak penetration into the platinum-sensitive market (up from 20 percent) and cuts peak penetration into the platinum-resistant market to 15 percent from a previous 25 percent.

"These changes raise our 2021 niraparib sales estimate to $2.2 billion (from $1.6 billion), which also includes revenues from metastatic breast cancer gBRCAmut patients," Nierengarten highlighted.

The analyst says 50 percent peak market share is achievable given the favorable comparison of niraparib with data from olaparib-treated patients and olaparib being limited to gBRCA patients only.

Nierengarten also noted niraparib has first-mover advantage in this treatment setting versus rucaparib.

"Underwhelming data from rucaparib in the third line setting presented at ESMO gives us greater confidence that niraparib will be the market leader in the earlier line of therapy, especially if a companion diagnostic is required," the analyst added.

Shares of Tesaro closed Friday's regular trading at $99.26. In the pre-market hours Monday, they gained 9.82 percent to $109.01 and near its 52-week high of $110.48.

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