Alder BioPharmaceuticals, Inc. ALDR 1.04% is set to release its second-quarter earnings report after the bell Tuesday, and Stifel reviewed the stock ahead of the print.
The Analysts
Stifel analyst Paul Matteis initiated coverage of Alder BioPharmaceuticals with a Buy rating and $30 price target.
The Thesis
Alder is an attractive buy due to its position in migraine prevention, Matteis said in the initiation note.
The company’s development of eptinezumab remains underappreciated by investors, but it operates in a difficult market, the analyst said.
“It won’t be easy for Alder to compete with Amgen, Novartis, Lilly and Teva (assuming the company goes it alone); however, one element of migraine that’s underappreciated — and good for Alder — is that treatment occurs at a reasonably modest number of specialized, high-volume clinics.”
Stifel projects a 90-percent chance the FDA will approve the candidate in early 2020, with the drug reaping $1 billion in gross sales by 2025.
ALDR’s main catalyst is its product, Matteis said. Eptinezumab is fast-acting and achieves full effect within 24 hours, while competitors take considerably longer to show results, he said. The treatment can offer patients the best shot at diminishing recurring migraines, the analyst said.
Despite ALDR’s minimal market share, Matteis said a 20-percent share is reasonable.
“Our model assumes that eptinezumab thrives in the severe setting and is used much more modestly in frequent episodic patients where the convenience of subcutaneous drugs, and possibly orals, may represent more of a differentiating factor.”
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