UPDATE: J.P. Morgan Reiterates Overweight Rating, Raises PT on Onyx Pharmaceuticals on Palbo Incorporation

In a report published Thursday, J.P. Morgan analyst Cory Kasimov reiterated an Overweight rating on Onyx Pharmaceuticals

, and raised the price target from $100.00 to $105.00. In the report, Kasimov noted, “We are reiterating our OW rating on ONXX (one of our top picks) and bumping our price target to $105 (from $100) as a result of incorporating palbociclib (palbo, or PD-991) into our valuation. Palbo, which entered into Phase 3 last month, is being developed by Pfizer (PFE; covered by JPM analyst Chris Schott) and has arguably become one of the most talked about drugs in all of clinical development following the highly compelling Phase 2 data presented at the San Antonio Breast Cancer Symposium (SABCS) in Dec. It's unusual for a single pipeline product to become such a focus for a large pharma company like PFE, and yet despite the attractive economics (a flat 8% royalty on sales), palbo is a relatively infrequent topic of conversation re ONXX as investor attention remains overwhelmingly focused on the myeloma drug Kyprolis. We see the potential palbo royalty stream owed to ONXX as an underappreciated part of the story. Moreover, in our view, the favorable economics on this promising product further adds to the scarcity value of the company, which already has substantial rights to three approved oncology assets (Kyprolis, Nexavar, and Stivarga).” Onyx Pharmaceuticals closed on Wednesday at $88.53.