April 21, 2017
By Mark Terry, BioSpace.com Breaking News Staff
Biotech stocks can be volatile, but it’s possible to catch companies on the upswing or that have pending catalysts. SmarterAnalyst looks at two biotech companies that are likely on their way up.
Headquartered in Los Angeles, CytRx announced on April 19 that it had reached an agreement with the U.S. Food and Drug Administration (FDA) regarding its New Drug Application (NDA) for aldoxorubicin in soft tissue sarcomas (STS). The plan is to submit a rolling NDA under section 505(b)(2) in the last quarter of this year. It also plans to discuss filing a Marketing Authorization Application (MMA) with the European Medicines Agency (EMA), with a possible commercial launch in the U.S. in 2018.
“As we had guided at the start of the year,” H.C. Wainwright analyst Andrew Fein wrote, “clarity on a regulatory strategy forward was likely to hold some upside for the company and its lead asset Aldox, which in our view was no longer viewed as a fileable or an approvable asset by the market following last year’s Phase III results. We believe that the key component of yesterday’s update (as well as a key focus of any risk/reward diligence going forward) is the decision to pursue an NDA under section 505(b)(2), which has received an FDA nod.”
As a result, Fein repeats a “Buy” rating with a target price of $4.
CytRx is currently trading for $0.58.
Based in New York City, Synergy Pharmaceuticals focuses on developing novel drugs for gastrointestinal (GI) disorders. On March 27, Synergy announced it had submitted a supplemental New Drug Application (sNDA) for Trulance (plecanatide) to treat adults with irritable bowel syndrome with constipation (IBS-C). The drug was approved on January 19, 2017 in the U.S. for adults with chronic idiopathic constipation (CIC) and is on the market.
Tim Chiang, an analyst with BTIG, wrote, “We believe the Co.’s commercial efforts behind Trulance are focused on differentiating Trulance (plecanatide; for the treatment of chronic constipation) from other treatments like Linzess (linaclotide; for the treatment of chronic constipation and IBS-C) and Amitiza (lubiprostone; for the treatment of chronic constipation, IBS-C, and opioid-induced constipation).”
In particular, Chiang met with senior Synergy team members recently, and came away with an understanding of the company’s “heavy sampling program,” which will offer 7-day samples to “high prescribing physicians.” In addition, Synergy’s sales and commercial team has a lot of experience that, Chiang writes, is “well-positioned to deliver on solidly executing the launch of Trulance.”
Chiang projected 2017 sales projections for Trulance of $21.5 million, down from a previous projection of $34 million, and 2018 sales of $100 million, down from an earlier projection of 120 million.
“While we are tempering our CY17 and CY18 Trulance sales forecasts,” Chiang wrote, “to reflect a more gradual ramp, we continue to believe that Trulance has the potential to achieve meaningful sales in the U.S. as a result of the product’s efficacy/side effect profile, which includes a low ~5 percent incidence of diarrhea.”
Synergy is currently trading for $4.14.
TipRanks analytics gives Synergy a “buy” rating. Of six analysts over the last three months, five gave it a “Buy” while one gave it a “Sell.”
