Goldman Sachs analyst Salveen Richter downgraded Madrigal Pharmaceuticals to Neutral with an unchanged price target of $314. The stock closed Friday down 41c to $250.93. The analyst continues to view MGL-3196 as a “best-in-industry, next-generation drug” for nonalcoholic steatohepatitis. However, with the stock up 173% year-to-date, he believes Madrigal is entering a “period of limited value-driving catalysts.” Richter, while admitting a buyout could occur, sees limited upside in the shares.
Monday, August 6, 2018
Sage Therapeutics initiated with an Overweight at Piper Jaffray
Piper Jaffray analyst Danielle Brill started Sage Therapeutics with an Overweight rating and $206 price target. The analyst thinks Sage is on course to becoming a leader in central nervous system therapeutics. Its lead compound, IV brexanolone, is on track to becoming the first FDA approved therapy for postpartum depression by the end of 2018, Brill tells investors in a research note.
Acadia downgraded to Neutral from Overweight at Piper Jaffray
Piper Jaffray analyst Danielle Brill downgraded Acadia Pharmaceuticals to Neutral and cut her firm’s price target for the shares to $19 from $61 after taking over coverage of the name. The stock closed Friday down 27c to $15.22. The recent negative headlines related to potential Nuplazid safety issues will continue to weigh on sales and the shares for the foreseeable future, Brill tells investors in a research note. Further, the analyst does not have a high level of conviction for positive data from Acadia’s near-term catalysts, namely the Phase 2 major depressive disorder data in September and the Phase 2 negative schizophrenia symptoms readout in the first half of 2019.
Nutrisystem rallies after Legion Partners sees path to $90 share price
Legion Partners Asset Management late Thursday disclosed a 5.22% stake in Nutrisystem, representing over 1.5M shares. The filing allows for activism. Legion believes the current market price of the shares does not reflect Legion’s intrinsic value. In the firm’s view, one of the key areas that does not appear to be well understood or fully appreciated by the market is the opportunity for the company to improve the efficiency of its approximately $200M annual marketing expense. Historically, Nutrisystem has relied primarily on short form television marketing, Legion writes in a regulatory filing. Further, Nutrisystem’s cost of acquiring an individual customer has increased annually from approximately $184 in 2007 to over $300 in 2017, the firm contends, citing its own estimate. Legion Partners believes the company can lower customer acquisition costs “materially” over the next several years by shifting its media mix to more effective digital marketing channels and initiatives. In addition, the firm believes improvements to the company’s digital product portfolio “can substantially increase customer lifetime value.” The “impact of gaining marketing efficiencies through digital advertising and upgrading the digital product portfolio should be reflected in a rapid expansion in the profitability” of Nutrisystem, contends Legion. It estimates that if the company can improve its overall digital strategy and marketing efficiency, the resulting decline in customer acquisition costs and reacceleration in customer growth could double reported earnings per share from $1.90 in fiscal 2017 to almost $4.00 in fiscal 2020, causing the valuation of the stock “to move from current prices to approximately $90 per share.” Nutrisystem closed Friday up 10%, or $4.10, to $43.50. Legions says it is “highly focused on collaborating” with Nutrisystem’s management and the board of directors to “significantly accelerate and improve” the company’s digital strategy efforts in order to “drive a substantial increase” in profitability. Legions added that it may seek to add certain digital marketing and product development expertise to the company’s board.
Vital Therapies upgraded to Outperform from Market Perform at William Blair
William Blair analyst Y. Katherine Xu upgraded Vital Therapies to Outperform ahead of the VTL-308 readout in September. VTL-308 is the company’s Phase 3 trial designed to evaluate its Elad System in subjects with severe alcoholic hepatitis.
BioCryst granted FDA Fast Track Designation for Angioderma Med
BioCryst announced that the company has been granted Fast Track Designation by the U.S. FDA for BCX7353 for the prevention of angioedema attacks in patients with hereditary angioedema.
Gilead says China approves Genvoya for treatment of HIV-1 infection
Gilead Sciences announced that the China National Drug Administration has approved Genvoya for the treatment of HIV-1 infection. Genvoya is the first TAF-based single tablet regimen for the treatment of HIV to be approved in China. Genvoya is indicated in China as a complete regimen for the treatment of adults and adolescents infected with HIV-1 without any known mutations associated with resistance to the integrase inhibitor class, emtricitabine or tenofovir. In the United States, Genvoya has a boxed warning in its product label regarding the risks of post treatment acute exacerbation of hepatitis B.
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