Reports Q4 revenue $1.69M, consensus $1.13M.
Thursday, March 7, 2019
Wells lowers Intercept target to $99 from $113 after NASH expert survey
Wells Fargo analyst Jim Birchenough lowered his price target for Intercept Pharmaceuticals to $99 from $113 after surveying 25 hepatologists and gastroenterologists that are experts in nonalcoholic steatohepatitis treatment. The stock closed yesterday down 3%, or $3.27, to $104.45. Overall survey results suggest a modest perceived clinical benefit for Intercept’s obeticholic acid, with major concerns regarding pruritus, but potential for physician education on the data. The analyst keeps a Market Perform rating on Intercept shares.
Allergan price target lowered to $175 from $195 at Stifel
Stifel analyst Annabel Samimy said he believes the rapastinel program is likely over after Allergan’s drug failed its three pivotal trials in adjunctive treatment for acute Major Depressive Disorder, or MDD. While he believes it was one of the anticipated “must-succeed” programs within Allergan’s pipeline, Samimy noted the company does have additional programs in its deep pipeline, the most near-term that could be of interest being abicipar for wet AMD. Samimy lowered his price target on Allergan shares to $175, adding that he questions whether the company needs to reconsider business development in the context of defining its broader strategy. He maintains a Hold rating on Allergan shares.
Gritstone Oncology initiated at H.C. Wainwright
Gritstone Oncology initiated with a Buy at H.C. Wainwright. H.C. Wainwright analyst Swayampakula Ramakanth started Gritstone Oncology with a Buy rating and $17 price target. The company’s core technology is its Gritstone EDGE artificial intelligence platform, which has demonstrated an up to nine-fold increased prediction accuracy for identifying potential tumor neoantigens, Ramakanth tells investors in a research note. Further, Granite-001 has the potential to become the first “universal” vaccine that can be used across the full range of cancer indications, which could significantly increase its market potential, says the analyst.
WellCare’s new disclosures should help level-set PDP contribution, says Stephens
Stephens analyst Scott Fidel said WellCare shares have recently been “caught up in the dragnet of anxiety” hitting the MCO group around the potential impact of the HHS rebate proposal on the Medicare and Medicaid markets, along with general uncertainty around “Medicare for All,” the 2020 presidential elections and potential future changes to the existing PBM pricing/profit model. Given the shifting market sentiment, WellCare gave “some new disclosures at an investor conference that we have never seen them give us before,” noted Fidel, who reports that the company’s CFO said that Medicare PDP will only account for about 7.5% of 2019 adjusted EPS. Some recent Street estimates have assumed PDP was driving upwards of 20% or higher of overall EPS, according to Fidel, who said this new disclosure “helps to level-set the actual contribution from this business.” Fidel also noted that WellCare’s CFO said he is “very pleased” with the performance of its new PDP plans that have generated significant enrollment growth in 2019. Fidel keeps an Overweight rating and $305 price target on WellCare shares.
Sarepta sees slight bounce back after Cantor calls selloff unwarranted
Shares of Sarepta Therapeutics are bouncing back slightly following yesterday’s 11% selloff. The weakness yesterday stemmed from Tuesday’s night capital raise as well as the resignation of FDA Commissioner Scott Gottlieb, and, to a lesser extent, a new short report, Cantor Fitzgerald analyst Alethia Young told investors last night in a research note. On the short report, the analyst disagrees with her understanding of its key points, and particularly thinks increasing the betasarcoglycan protein will lead to functional change over time. Sarepta has a clear lead in Duchenne muscular dystrophy gene therapy and its data has set a high bar for competition, Young wrote. Further, she thinks that if demand is available and companies can get capital they do. As such, the analyst is unconcerned by Tuesday’s equity raise. As it relates to Dr. Gottlieb’s departure, Young notes that Dr. Woodcock, who has been supportive of DMD, is still at the agency. All today, the analyst views yesterday’s selloff as unwarranted and reiterated Sarepta as one of her top 2019 picks. She has an Overweight rating on the shares with a $231 price target. Sarepta in late morning trading is up 2%, or $2.38, to $134.63.
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