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Leerink: Pharmacyclics Is Now Worth $240

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In a report published Monday, Leerink analysts Howard Liang and Gena Wang boosted their price target on Pharmacyclics, Inc. (NASDAQ: PCYC) shares from $204 to $240. The reason behind the increase is not only a merger rumor, but also "intriguing PDL1 combination data.

"Preclinical data supporting the exploration of the combinations of Imbruvica with checkpoint inhibitors as established in the announced BMY (OP) and AZN (MP) collaborations were published" last Friday, the report explained. "In addition to potentially expanding the utility of Imbruvica to solid tumors by enhancement of immuno-oncology (IO) agents, the data seem to imply that this IO combination potential appears not mediated by Burton's tyrosine kinase (BTK) inhibition, therefore may be differentiated compared to the more selective BTK inhibitors in development, although this clearly would need to be confirmed by clinical data."

M&A valuation is also driving the price target up as rumors multiply. The firm's DCF valuation goes as high as $262 per share. This valuation is primarily driven by the currently visible liquid tumor opportunities. However, the $240 price target "assumes that the acquirer gets to keep some upside. A further upside scenario would be if the opportunity beyond hematological malignancies, in solid tumors (either as IO combination or as a targeted agent), graft versus host disease, or auto-immune diseases materializes."

Latest Ratings for PCYC

DateFirmActionFromTo
Mar 2015Leerink SwannDowngradesOutperformMarket Perform
Mar 2015NomuraDowngradesBuyNeutral
Mar 2015Wells FargoDowngradesOutperformMarket Perform

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Posted-In: Gena Wang Howard Liang Imbruvica LeerinkAnalyst Color Price Target Analyst Ratings

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