Biogen resumed with a Market Perform at Raymond James. Raymond James analyst Steven Seedhouse resumed coverage of Biogen with a Market Perform rating, stating that the company’s remaining business following the failure of aducanumab “appears a little fragile” and faces “existential risk” in some cases, such as the Tecfidera IPR decision due in 2020. Near-term pipeline readouts, including the nearest readouts on Vumerity and BIIB067, don’t seem high-impact enough to reverse sentiment, Seedhouse tells investors.
Wednesday, April 10, 2019
ICER draft report presents modest headwind for DBV, Aimmune, says Stifel
Stifel analyst Derek Archlia noted that ICER, an independent and non-partisan research organization that analyzes the benefits along with costs of treatments, issued a draft report assessing the value and effectiveness of Aimmune’s (AIMT) AR101 and DBV Technologies’ (DBVT) Viaskin peanut for peanut allergy. He believes ICER’s cost-effectiveness analysis re-affirms his cautious approach on the peanut immunotherapy category and believes the report presents a modest headwind for the stocks. However, this was only a draft report in which ICER made assumptions for costs since no official pricing has been announced for either therapy, Archlia noted. He maintains Hold ratings on both Aimmune and DBV Technologies.
SunTrust lowers price targets on CVS, raises price target on WellCare
SunTrust analyst David MacDonald lowered his price target on CVS (CVS) to $65 from $85 as part of his broader research note previewing Q1 results for the healthcare services stocks. The analyst expects the quarter to reflect the company’s challenges around reimbursement pressure, fewer generics, and lower brand inflation that should be a detriment to retail pharmacy and long-term-care businesses, even though he maintains a bullish view on the stock longer term based on its risk-reward profile. MacDonald also raises his price target on WellCare (WCG) to $340 from $305, saying his bullish expectation for the stock is driven by the company’s “strong core trends, high visibility, and superb win rate”. The analyst also cites the pending WellCare acquisition by Centene (CNC) yielding a “meaningful combined pharmacy opportunity and increased diversification” from an expanded “Medicaid footprint”.
Flexion slides after ‘unanticipated’ commercial executive change
Flexion is looking to replace Senior VP of Commercial Operations Dan Deardorf with a Chief Commercial Officer
Shares of Flexion (FLXN) are under pressure on Wednesday after the company’s CEO announced at an investor conference that it has parted ways with its Senior Vice President of Commercial Operations, a move Raymond James analyst Elliot Wilbur calls “completely unanticipated.” While Wells Fargo analyst David Maris acknowledged that the timing of the announcement is “less than ideal,” he believes that if things are not going well or even if they can be better, it “makes sense to bring in additional talent.”
‘COMPLETELY UNANTICIPATED’: Noting that Flexion’s CEO announced at an investor conference that the company has parted ways with its Senior VP of Commercial Operations Dan Deardorf and is looking to replace him with a Chief Commercial Officer, Raymond James’ Wilbur said that the news was “completely unanticipated” and there “will no doubt be a new round of jitters around the launch trajectory of Zilretta” following the announcement. Seeking to ease concerns, the company reiterated its annual revenue guidance of $65M-$80M, Wilbur noted. While the receipt of a dedicated J Code for Zilretta “certainly made the reimbursement process smoother” and is clearly a selling point from the salesforce’s perspective, the analyst pointed out that management recently indicated that it had underestimated the dynamics of payer and reimbursement hurdles at the individual practice level and how the evolution of larger practices had created more encumbrances to initial adoption based on individual practice payer and economic dynamics. Overall, Wilbur believes Zilretta has underperformed an optimistic set of external expectations that should not have been allowed to evolve in the first place, but it is “still early in the Zilretta launch phase and not too late to course correct.” Management and the board seem to have recognized this and made what was no doubt a tough call, he contended. Wilbur reiterated a Strong Buy rating on Flexion shares.
MAKES ‘SENSE’ TO BRING IN ADDED TALENT: After catching up with management briefly, Wells Fargo’s Maris noted that Flexion feels that it is leaving the “building the team mode” and/or initial launch mode and entering a marketing/focus-on-growth mode, and this may require additional senior management. From what the analyst can surmise, the company was not thrilled with 2018 Zilretta growth and is looking for ways to accelerate growth and uptake of Zilretta. Nonetheless, Maris noted that it is “clear from the stock reaction” that this is creating additional uncertainty with investors, especially since earlier this year the 2019 sales guidance fell below consensus. While the timing of the announcement is “less than ideal,” coming during a quiet period ahead of first quarter results, the analyst argued that if things are not going well or even if they can be better, “it makes sense to bring in additional talent.” Maris acknowledged his discomfort with the uncertainty the “unexpected” news brings, but thinks that at two times 2020 sales for a growing product, the shares represent a “compelling value” and believes Zilretta will be a growth product for the next several years. The analyst reiterated an Outperform rating and $26 price target on Flexion shares.
Incyte initiated at Stifel
Incyte initiated with a Hold at Stifel. Stifel analyst Stephen Willey started Incyte with a Hold rating and $82 price target.Target $82. The analyst says the $3.5B in Jakafi-related product revenue subject to expiring exclusivity beginning in late-fiscal 2027 or early 2028 “meaningfully” offsets his enthusiasm on Incyte’s expanding pipeline opportunities. As such, he prefers to wait for a better entry point into the name. Further, Willey believes a takeover of the company is unlikely at current valuation levels. Rather, he expects Incyte to be increasingly more acquisitive given the strength of its balance sheet.
https://thefly.com/landingPageNews.php?id=2891053
https://thefly.com/landingPageNews.php?id=2891053
Seattle Genetics initiated at Stifel
Seattle Genetics initiated with a Hold at Stifel. Stifel analyst Stephen Willey initiated Seattle Genetics with a Hold rating and a price target of $70, saying that while the company “commands a leadership position in the development of antibody-drug conjugate technology”, the current ADCETRIS estimates as “much-too-optimistic” in suggesting trajectory to sales of over $1B. The analyst adds that although the “recently-announced phase data for enfortumab vedotin will initiate Seattle Genetics’ transition to a multi-product commercial company”, he sees the “presumption of clinical/commercial success to be appropriately risk-adjusted in the stock at these levels.”
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