Market Overview

Pet Therapeutic Entyce Can Drive Aratana Higher, Stifel Says In Upgrade

Share:
Pet Therapeutic Entyce Can Drive Aratana Higher, Stifel Says In Upgrade
Related PETX
The Daily Biotech Pulse: Regulatory Roadblock For Immunomedics, AdCom Split On Lexicon's Diabetes Drug
44 Biggest Movers From Friday
New CEO at Aratana Therapeutics (Seeking Alpha)

Aratana Therapeutics Inc (NASDAQ: PETX), which has a portfolio treatments for pet diseases and disorders, is likely to ride high on product momentum, according to Stifel. 

The Analyst

Analyst Jonathan Block upgraded shares of Aratana from Hold to Buy and raised the price target from $6 to $8, suggesting 106-percent upside for the equity. 

The Thesis

Stifel's recent optimism on Aratana is based on Entyce, the company's FDA-approved therapeutic for appetite stimulation in dogs that launched in October, Block said in a Monday note. Going by its early traction, the analyst said he expects Entyce to be the company's main revenue driver in the coming years.

Galliprant, Aratana's canine osteoarthritis drug, is being sold worldwide by Elanco, with the former receiving mid-teen royalties and potential milestones totaling $75 million, Block said. The analyst expects the first $15-million milestone payment to accrue in 2018 and to be paid out to Aratana in 2019. 

Galliprant alone could be worth $2-$3 to Aratana's stock, the analyst said. Entyce could help the company's shares appreciate from current levels, Block said. 

"Furthermore, we argue that Aratana's portfolio, which contains three material new chemical entities, may be appealing to a big animal health company looking to kickstart top-line growth." 

Elanco would be the most obvious candidate, as the company seeks to strengthen its overall portfolio ahead of a potential spin-off or sale, the analyst said. 

The Price Action

Aratana shares were down more than 23 percent over the past year through Monday.

The shares were rallying more than 11 percent at the time of publication Tuesday.

Related Links:

The Week Ahead In Biotech: Earnings, PDUFA Dates And More

Goldman Sachs: Madrigal Pharma Has Blockbuster Potential In Liver, Cholesterol Treatments

Latest Ratings for PETX

DateFirmActionFromTo
Jan 2019Stifel NicolausDowngradesBuyHold
Aug 2018Stifel NicolausMaintainsBuyBuy
Mar 2018Stifel NicolausUpgradesHoldBuy

View More Analyst Ratings for PETX
View the Latest Analyst Ratings

Posted-In: Jonathan Block StifelAnalyst Color Upgrades Price Target Analyst Ratings Best of Benzinga

 

Related Articles (PETX)

View Comments and Join the Discussion!

Latest Ratings

StockFirmActionPT
MDRXKeyBancUpgrades0.0
ANETNomuraUpgrades260.0
CNPRBC CapitalUpgrades34.0
FISVOppenheimerUpgrades88.0
FNDUBSUpgrades37.0
View the Latest Analytics Ratings
Don't Miss Out!
Join Our Newsletter
Subscribe to:
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Daily Analyst Rating
A summary of each day’s top rating changes from sell-side analysts on the street.
Fintech Focus
Your weekly roundup of hot topics in the exciting world of fintech.
Thank You
for registering for Benzinga’s newsletters and alerts.
• The Daily Analysts Ratings email will be received daily between 7am and 10am.
• The Market in 5 Minutes email will be received daily between 7am and 8am.
• The Fintech Focus email will be received every Friday between 2pm and 5pm.

Leerink: Armo Biosciences' 'Promising' Data Justifies A Bullish Stance

Mid-Day Market Update: Dow Rises Over 100 Points; InspireMD Shares Spike Higher