Ladenburg On Biotech: Starts Achillion, Alnylam, Corcept, Trevana At Buy

Ladenburg Thalmann’s Christopher S. James initiated coverage of four biotech companies with a Buy rating, given that each has a promising lead drug candidate that is expected to drive growth in the near future.

Achillion Pharmaceuticals

James initiated coverage of Achillion Pharmaceuticals, Inc. ACHN with a Buy rating and price target of $10.

The analyst believes there are two “very clear pathways for significant value creation for investors.”

The first is Achillion Pharmaceuticals’ ACH-4471 program, which addresses multiple rare diseases that are disorders of a complement system.

In this complement space, the company is in the process of developing small molecule factor D inhibitors for the treatment of C3 glomerulopathy (C3G) (a rare renal disease), paroxysmal nocturnal hemoglobinuria (PNH) and atypical hemolytic uremic syndrome (aHUS).

The second is the company’s HCV program, for which Achillion Pharma has partnered with Janssen Pharmaceuticals.

“Although we believe the HCV pathway will be challenging given the competitive landscape, the collaboration with Janssen has over $900 million in potential milestones and royalties that escalate into the mid-20 percent range,” James stated.

In addition, Achillion Pharma has recently received a milestone payment of $15 million, associated with enrollment in the OMEGA-1 Phase 2b global study of its candidate for HCV patients.

Corcept Therapeutics

James also initiated coverage of Corcept Therapeutics Incorporated CORT with a Buy rating and price target of $14.

The company’s lead product, Korlym, addresses the treatment of Cushing’s syndrome, which is an orphan indication affecting roughly 23,000 adults in the United States.

The analyst believes that there is an addressable patient population of approximately 11,500 in the United States alone, although Corcept Therapeutics is like to achieve only single digit penetration.

“We see growth coming from a large number of endocrinologists who will eventually prescribe Korlym, and possibly 3-times more physicians would prescribe CORT125134 for Cushing’s syndrome,” James mentioned.

Trevena

The analyst initiated coverage of Trevena Inc TRVN with a Buy rating and price target of $15.

“Trevena is advancing three product candidates from its proprietary platform focused on developing best-in-class receptor modulators with the potential to revolutionize standards of care,” James pointed out.

Trevena's lead compound, oliceridine (TRV130), has demonstrated “potent analgesia” with lesser respiratory depression and constipation than morphine, which is the standard of care at present.

“We see three major near-term de-risking events for TRVN: (1) top-line data from two Phase 3 pivotal studies in 1Q17 that has a high probability of success (PoS) based on data from two Phase 2 studies in distinct patient models: abdominoplasty and bunionectomy surgery; (2) an NDA filing for oliceridine in 2H17; and (3) a potential FDA approval for oliceridine in 2018,” the analyst went on to say.

Alnylam Pharmaceuticals

James initiated coverage of Alnylam Pharmaceuticals, Inc. ALNY with a Buy rating and price target of $75.

The analyst sees Alnylam Pharma as the “premier RNAi play in the industry,” given the company’s impressive diverse, deep and advanced pipeline.

“By 2020, Alnylam expects to have three marketed products and 10 clinical programs, including four Phase 3 programs, across three therapeutic areas,” James noted.

During 2017, the analyst expects greater focus on safety, following the discontinuation of revusiran due to an imbalance in mortality in the Phase 3 ENDEAVOR study.

“We believe the market overreacted to this event and view the current share price as an attractive entry point for both new and current investors,” James added.