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Bank Of America Q3 Small & Mid-Cap Biotech Preview

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Bank of America on Monday published a Q3 2014 earnings preview for small- to mid-cap biotech companies.

Analyst Steve Byrne noted that valuations are more attractive after the recent pull-back.

Below are highlights from the report with the firm’s current ratings and price targets.

Aegerion Pharmaceuticals, Inc. (NASDAQ: AEGR) - Buy, $48 price target

"Q3 sales are key to near-term valuation, as the market has low expectations on the company’s ability to reach its 2014 revenue forecast range of $180-$200mn."

Pacira Pharmaceuticals Inc (NASDAQ: PCRX) - Buy, $105 price target

"Exparel sales have been on a steep launch curve, supporting expectations that use is barely penetrating the addressable market of post-surgical analgesics. We look for 3Q sales of $48mn and expect sales of $1bn by 2018."

Incyte Corporation (NASDAQ: INCY) - Buy, $82 price target

"We expect Jakafi sales of $91mn in 3Q, representing 28 percent of MF patients, vs our peak of 40 percent and the company’s target of 50 percent. We expect an approval for PV in December. We incorporated modest price adjustments for Jakafi in our model."

Cubist Pharmaceuticals Inc. (NASDAQ: CBST) - Buy, $89 price target

"We expect sustained growth in Cubicin sales but note a risk due to the potential for less MRSA infections, or a shift to out-patient treatments, either from CBST’s promotion of Sivextro, or the early launch of DRTX’ Dalvance. We increased gross margins for Cubicin offset by lower expectations for Dificid."

The Medicines Company (NASDAQ: MDCO) - Buy, $37 price target

"We model flattish US Angiomax revenue of $153mn in line with consensus. We expect updates on the imminent Orbactiv launch and Cangrelor’s regulatory status. Ongoing Angiomax litigation remains a key risk."

Arena Pharmaceuticals, Inc. (NASDAQ: ARNA) - Underperform, $5 price target:

"ARNA’s Belviq script trends support steady revenue growth, but we model sales of $13mn vs. consensus of $21mn."

Vivus, Inc. (NASDAQ: VVUS) - Underperform, $4 price target

"Qsymia trends are flattish and our 3Q sales estimate is $13mn vs. consensus of $12mn."

Seattle Genetics, Inc. (NASDAQ: SGEN) - Underperform, $34 price target

"We look for continued flattish revenue trends for Adcetris, with 3Q sales of $45mn (flat from 2Q14). Current valuation assumes a significant expansion into earlier lines of therapy, which we remain cautious about."

Theravance Inc (NASDAQ: THRX) - Neutral, $27 price target

"We lowered our 3Q US Breo estimate slightly to $14mn (from $17mn) and more significantly for US Anoro ($5mn from $15mn) due to sluggish script trends. We look for a gradual pickup in 2015, but lower trajectories reduced our NPV to $27 from $30. Our longer term expectations for these drugs are based on best-in-class efficacy and expectations for favorable results from Salford and SUMMIT studies."

NPS Pharmaceuticals, Inc. (NASDAQ: NPSP) - Buy, $42 price target

"We look for increased Gattex growth and model 3Q Gattex revenue of $28mn in line with consensus. Our FY14 sales estimate of $101mn is slightly below consensus of $104mn (guidance of $100-$110mn)."

Alkermes plc (NASDAQ: ALKS) - Underperform, $41 price target

"Revenue is primarily royalty-driven from JNJ (Consta and Sustenna), ACOR/BIIB (Ampyra/Fampyra) and AZ (Bydureon). We look for Vivitrol 3Q sales of $25mn, up 16 percent from the prior quarter."

Latest Ratings for AEGR

DateFirmActionFromTo
Feb 2016DowngradesNeutralUnderperform
Dec 2015UpgradesSellBuy
Nov 2015UpgradesUnderperformNeutral

View More Analyst Ratings for AEGR
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Posted-In: Bank of America Steve ByrneAnalyst Color Previews Analyst Ratings Trading Ideas

 

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