CMS document yesterday bullish for Portola Pharmaceuticals, says Citi

The Centers for Medicare and Medicaid Services’ fiscal 2020 Medicare inpatient hospital document released yesterday includes two bullish data points on Portola Pharmaceuticals’ Andexxa, Citi analyst Yigal Nochomovitz tells investors in a research note. The first is the announcement that CMS is proposing to raise the Inpatient Hospital New Technology Add-On Payment from 50% to 65%, which would raise CMS’s reimbursement for Andexxa in 2020 from $14,062.50 to $18,281.25, says the analyst. The second data point, according to Nochomovitz, is the phrase on page 1,717 that reads, “Based on the applicant’s estimate from FY 2019, we currently estimate that new technology add-on payments for AndexXa would increase overall FY 2020 payments by $98,755,313 (maximum add-on payment of $18,281.25 * 5,402 patients)”. The reference to 5,402 patients appears to provide insight into market uptake for 2019, says the analyst. He believes the figure points to $145M in 2019 revenue, assuming a $28,125 average price and 95% gross-to-net, which he notes is well above the consensus of $115M. Nochomovitz keeps a Buy rating on Portola with a $50 price target.

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