Cantor On Oncobiologics: 'Biosimilar Play With Potential For Interchangeability'
Cantor analysts, Mara Goldstein and Monica Gorman, believe that there existed Biosimilar play with potential for interchangeability in respect of Oncobiologics Inc (NASDAQ: ONSIU) shares. As a result, the two analysts have initiated the stock with a Buy Rating and kept a price tag of $15.00.
The brokerage investment thesis is that Oncobiologics was working in the rapidly evolving field of biosimilars, an area mature enough for development with only one approved biosimilar. The two analysts expect more than 30 biologic products in connection with $100 billion in revenue is expected to go off patent by the year 2020.
Goldstein and Gorman pointed out, "The company has a pipeline that includes two Phase III candidates as well as earlier-stage assets. We think the combination of the company's clinical programs plus cost-advantaged manufacturing systems could provide the bedrock for substantive future cash flows."
Currently, the company has a development partner, which would add to adalimumab's clinical program in exchange for revenue rights, according to Cantor. However, the brokerage pointed out that the company does not have a commercialization partner for bevacizumab nor for its earlier-stage pipeline of "second wave" biosimilars. They said, "We expect some kind of partnership will materialize, providing the company with greater optionality." They added, "We expect ONS-3010 to finish its clinical program in 2017, which could allow market entry as early as 2019"
As far as valuation of Oncobiologics, the two analyst said, "We looked at a variety of metrics including discounted revenue calculation and DCF. We utilize the discounted revenue for our price target, which is $15 per share."
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