UPDATE: Piper Jaffray Initiates Coverage on Onconova Therapeutics with Overweight Rating, $38 PT on Multiple Positive Factors

In a report published Monday, Piper Jaffray analyst M. Ian Somaiya initiated coverage on

with an Overweight rating and $38.00 price target. In the report, Piper Jaffray noted, “We are initiating coverage on Onconova with an Overweight rating and a 12-month price target of $38 per share. We believe lead drug rigosertib offers a differentiated profile from the highly valued PI3K class of inhibitors (idelalisib and IPI-145) and similar drugs (ibrutinib), while targeting an alternative development strategy of MDS and pancreatic cancer versus leukemia/lymphoma, which should allow a fast route to market with limited competition. We believe the strong OS data from the Phase II in refractory higher risk MDS point to positive Phase III data in 1Q14, with launch by 2015. We estimate peak US sales of $500mn (WW $1bn) in this Orphan indication as refractory MDS patients have limited options and median survival measured in weeks. Upside expected from rigosertib (oral) moving to frontline low risk MDS (Phase II data at ASH Dec 7-10, 2013), and from positive Phase II/III frontline metastatic pancreatic cancer data (1Q14).” Onconova Therapeutics closed on Friday at $25.69.