Flexion Therapeutics Inc FLXN is scheduled to report preliminary fourth-quarter Zilretta sales results and initial 2019 guidance. This will nudge expectations toward reality, as the current consensus estimates for Zilretta sales appear too aggressive, according to Raymond James.
The Analyst
Analyst Elliot Wilbur maintains a Strong Buy rating on Flexion Therapeutics.
The Thesis
Zilretta is a “highly differentiated asset,” and its efficacy and safety profile is compelling, which supports a peak sales potential close to $700 million by 2030, Wilbur said in a Wednesday note.
Flexion is likely to meet the 2018 consensus sales estimates of $23 million, with $10 million being generated in Q4, given Zilretta’s early launch, the analyst said. Yet the Street estimate for 2019 Zilretta sales of $98 million seems like a “stretch target,” while the 2020 consensus of $229 million appears “ridiculously out of touch with reality,” Wilbur said.
The expected estimate reductions should not be considered a negative given Flexion’s current share price levels and highly favorable reward-risk scenario, the analyst said. The reductions in estimates may keep buyers on the sidelines and short sellers engaged “until the adjustment is fully completed,” he said.
Price Action
Flexion Therapeutics shares were down 0.8 percent at $12.36 at the time of publication Thursday.
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