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BTIG Initiates Coverage On Sunesis Pharmaceuticals, Believes Company 'Will Be Breakeven By 2017'

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BTIG initiated coverage on Sunesis Pharmaceuticals, Inc. (NASDAQ: SNSS) Monday with a Buy rating and $5.50 price target.

Analyst Hartaj Singh believed the “current valuation reflects the Street assuming a 15-20 percent probability of vosaroxin approval in the US and EU. We believe the probability of US/EU approval for lead-asset vosaroxin is 50 percent based on the robustness of the VALOR trial and the high unmet need in relapsed/refractory (R/R) acute myeloid leukemia (AML).”

Singh noted that the “VALOR trial did miss its primary endpoint, a cause for concern regarding FDA and European Medicines Agency (EMA) approval. However, we believe the totality of the VALOR data will sway regulators favorably to approve vosaroxin in patients >60 years old (~2/3 of R/R AML patients).”

“We believe the company will be breakeven by 2017 – assuming US/EU approval – and will see rapid operating leverage due to the small cost base of operating in R/R AML, an orphan disease-like area. We see adjusted EPS of $6.74/share in 2019, 3 full years post-launch,” according to the analyst note.

The key risk to Singh’s thesis “would be FDA and/or EMA non-approval of vosaroxin in R/R AML.”

The $5.50 price target was based on a “stand-alone vosaroxin valuation” at $10 per share and applied a “50 percent probability of approval plus cash.”

Sunesis Pharmaceuticals traded at $2.80 in the after-hours session, up 5.26 percent.

Latest Ratings for SNSS

DateFirmActionFromTo
Dec 2018Initiates Coverage OnNeutral
Dec 2017UpgradesMarket PerformOutperform
Dec 2017DowngradesOutperformMarket Perform

View More Analyst Ratings for SNSS
View the Latest Analyst Ratings

Posted-In: btig Hartaj SinghAnalyst Color Price Target Initiation After-Hours Center Analyst Ratings

 

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