The Medicines Company Is A Top Pick For 2017

Following the impressive phase II ORION-1 results for the RNAi drug, inclisiran (a PCSK9 inhibitor for hypercholesterolemia), inclisiran's “expeditious” movement into phase III trials, the injunction granted against Praluent (another PCSK9 inhibitor) Thursday and with PCSK9 inhibitor outcomes studies approaching, Chardan Capital’s Gbola Amusa named The Medicines Company MDCO as the top biotech pick for 2017.

Amusa maintains a Buy rating on the company, with a price target of $65.

“We estimate that inclisiran could capture $3.9 billion of $33.3 billion total sales in the anti-PCSK9 cholesterol market; and, with important catalysts upcoming for inclisiran, we believe the market is likely to better appreciate the dynamics behind our estimates,” the analyst mentioned.

Catalysts

Medicines Company and its partner, Alnylam Pharmaceuticals, Inc. ALNY intend to start the Phase III trial of inclisiran in homozygous familial hypercholesterolemia (HoFH) in early 2017, with the Phase III trial for the drug candidate in atherosclerotic cardiovascular disease (ASCVD) expected in mid-2017.

Amusa expects PCSK9 inhibitor price reductions following positive trial outcomes, which in turn would lead to stronger uptake for PCSK9 inhibitors, along with “more robust financial markets appreciation for companies in the space.”

In addition, following the injuction granted against Praluent in the U.S. market, the competition for PCSK9 inhibitors is also likely to lessen.

Stock Could Outperform

“Based on the new Praluent decision, to us it is likely that by early 2018 consensus could reallocate its Praluent US sales estimates ($1.2 billion in 2022E revenues) to Amgen, Inc. AMGN and/or MDCO/ALNY,” the analyst stated.

Amusa believes this reallocation dynamic, along with the possibility of consensus forecast upgrades for inclisiran, could drive Medicines Company to outperform in 2017.

In Friday's pre-market session, shares of Medicines Company were up 7.69 percent at $38.25.