BMO Sets Outperform Rating, $26 Target On Ra Pharmaceuticals

Ra Pharmaceuticals Inc RARX's lead drug, RA101495, could take about 15 percent of the refractory MG (Myasthenia Gravis) market, given the convenience of a daily subcutaneous administration, BMO Capital Markets’ Ian Somaiya said in a report. He initiated coverage of Ra Pharma with an Outperform rating and a price target of $26.

Ra Pharma offers investors “de-risked access to the multi-billion-dollar complement space,” which Alexion Pharmaceuticals, Inc. ALXN seems to have “left open to competition,” Somaiya commented.

The Advantages

Ra Pharma’s lead drug is a low dose subcutaneous injection that can be self-administered. Moreover, its seven-day half-life provides coverage for missed doses and potentially weekly delivery.

“Pre-clinical and Phase 1 data suggest that RA101495 may provide more complete and sustained inhibition of C5 thus preventing breakthrough hemolysis observed in ~20 percent of patients managed on Soliris,” Somaiya wrote.

Although ALXN-1210 is better than Soliris, and Alexion is making advancements in subcutaneous ALXN-1210. The analyst pointed out, however, that the volume of drug required may impact convenience, allowing Ra Pharma’s lead drug to gain market share, “especially in a single payor environment where discounted pricing could lead to active switching.”

Ra Pharma went public with an IPO on the NASDAQ in October.