(Posted on Marketwatch 2/10/12). Quick speculative answer to the question, probably not in the near term. The remainder of Vertex's HCV portfolio either is in the latter stages of development and doesn't look like a contender for the 'interferon-free' Holy Grail, or in the case of their nucs, pretty far back in development and to say anything about them at this point would be grossly premature. Incivek sales have slowed more than forecasted for the current months in Q1 2012, although we've a month and a half to see another spike. The best bet for real value is their "ultra-orphan' CF drugs, which are impressive. I can't think of a disease state more deserving of better drugs. The population here is limited however, with the size of the disease state only being a fraction of what it is for HCV. Vertex may have taken this into consideration however, with a whopping price of $300,000 for a course of treatment.)
Can Vertex Pharma shares stage a comeback?
By Val Brickates Kennedy, MarketWatch
BOSTON (MarketWatch) — Can Vertex Pharmaceuticals Inc. shares stage a comeback?
That’s a nagging question for investors, who have watched Vertex’s once-bright star fade as the shares of rival hepatitis C-drug developers turn supernova. But Vertex shares could get a good stoking by mid-year, when the results of three key drug studies are due out.
Vertex’s stock had a banner 2011, its shares propelled to new heights by enthusiasm for its drug Incivek, a treatment for the hepatitis C virus, or HCV, a potentially deadly disease that attacks the liver. The drug belongs to a class of medications known as protease inhibitors that also includes Merck & Co. new HCV drug Victrelis.
In recent months, however, investor faith in Incivek’s long-term marketability has been deeply shaken by positive news about rival HCV drugs in development, particularly those in a class of drugs known as nucleotides, or “nukes.”
As a result, shares of Vertex swung from a 52-week peak of $58.87 in mid-May 2011, to a low of $26.50 by late November, when Gilead Sciences Inc. GILD +0.28% announced it was buying nuke-drug developer Pharmasset Inc. for $11 billion, a move that further underscored the perceived value of nuke drugs. Read more on M&A among HCV drug makers.
Over the past couple of months, the stock has managed to climb back into the upper $30s, due largely to anticipation ahead of the expected approval of the company’s drug Kalydeco. A novel treatment for the genetic disease cystic fibrosis, or CF, Kalydeco won approval earlier this month.
What’s still haunting the stock, say analysts, is concern about how well Incivek sales will hold up when the first nuke drugs hit the market and how well Vertex will be able to build-out its HCV and CF franchises.
With key clinical data for both drug programs looming on the horizon, many analysts have taken a wait-and-see approach to the stock. According to FactSet, the average analyst rating currently for Vertex is overweight, with a price target of just over $46 a share.
Two upcoming events, however, could give the shares a needed jolt.
The first is the expected release of early clinical data for two HCV nuke drugs that Vertex is co-developing with Alios BioPharma. The data is expected in the second quarter.
“Vertex’s HCV franchise is quickly becoming obsolete; to stay in the race, Vertex has to develop all oral, pan-genotypic combinations as quickly as possible, and the Alios nukes are the key to such hope,” wrote William Blair analyst Katherine Xu in a recent note about the significance of the data.
Xu recently lowered her price target for Vertex to $44 from $45, citing slower than expected sales of Incivek, but maintained her buy rating on the stock.
The second set of data, which involves the company’s CF drugs, could be the real market mover, however.
“Positive results in CF could get the stock moving again,” said Needham & Co. analyst Alan Carr, who also has a hold rating on the stock.
The CF data will be from a Phase II trial that is testing Kalydeco, which is only approved for use in CF patients with a rare gene mutation called G551D, or about 4% of CF patients, with another experimental CF drug dubbed VX-809.
Vertex is banking that the Kalydeco/VX-809 combo can successfully treat patients with the F508del gene mutation, which is carried by up to 90% of all CF patients. The data is expected mid-year.
Kalydeco, by the way, isn’t cheap. At nearly $300,000 a year, it ranks as one of the most expensive drugs on the market. It’s high price is due in part to its regulatory status as an “ultra-orphan” drug. The regulatory designation is designed to encourage the development of drugs for life-threatening and extremely rare conditions by offering certain financial incentives, such as market exclusivity.
Carr said that even with its current narrow prescribing indication, Kalydeco could reach peak sales of $1 billion a year. Even if Vertex were forced to lower the price of the product, which would like happen if it were approved for a much larger patient population, sales could still be in the billions.
“According to our probability-adjusted net present value model, for every 10% increase in the probability of success for the combo, Vertex’s stock will have $4-$5 per share in upside, representing a powerful lever,” wrote Xu, of the CF drugs.
“We believe there is a good chance for the Phase II combo data to be successful, which may compensate for the decline of the HCV franchise and lead to the next leg of growth for Vertex,” Xu added.
That said, the Kalydeco data may also prove to be a bust. Data from an earlier segment of the Phase II trial showed the combination to be only modestly effective. Vertex is hoping that data from a second segment of the trial, which is administering VX-809 in higher doses over a longer period of time, yields more impressive results.
“People are getting pretty excited, but I’m just not there yet,” said JMP Securities analyst Liisa Bayko in a recent interview. Bayko currently has a hold rating on the stock.
Val Brickates Kennedy is a reporter for MarketWatch in Boston.
Showing posts with label nucleoside analogs. Show all posts
Showing posts with label nucleoside analogs. Show all posts
Friday, February 10, 2012
Wednesday, February 1, 2012
Analysts weigh in on takeover odds of Achillion and Idenix...
Posted on Weds from Market Watch.com : It drives me nuts when 'nucs', the popular shortened term for 'nucleoside analogs', is spelled 'n-u-k-e-s' instead. We're talking drug development, not nuclear arms proliferation in unstable Middle East nations. Probably a good indicator I need something else to take out my frustrations on.
An article here from Market Watch talking to several analysts about possible mergers of Achillion and Idenix. No doubt that the slack of easing sales of Incivek and Victrelis will definitely be picked up by the 2nd and 3rd generation molecules, especially if developers can manage an interferon-free regimen. The HCV drug development space is incredibly hot right now, and with an estimated 170 million people infected, successful drugs are probable cash cows for many years to come.
Feb. 1, 2012, 12:01 a.m. EST
Achillion, Idenix could miss hep-C merger bonanza
By Val Brickates Kennedy, MarketWatch
BOSTON (MarketWatch) -- Investors tantalized by a recent string of lucrative takeover offers for hepatitis C drug-developers shouldn’t assume that an eye-popping bid for Idenix Pharmaceuticals and Achillion Pharmaceuticals is just around the corner, according to biotech analysts.
Both Idenix were put in play earlier this month by news that Bristol-Myers Squibb intends to buy Inhibitex Inc for $2.5 billion in cash.The offer represents a dazzling 163% premium over Inhibitex’s pre-bid closing price.
Bristol’s bid also comes on the heels of two other lucrative takeovers in the hepatitis C virus, or HCV, arena. In October, Roche announced it was paying a stunning 256% premium, or $230 million, for tiny Anadys Pharmaceuticals. That was followed by Gilead Sciences’s whopping $11 bid for Pharmasset Inc., which carried an 89% premium.
Rumors have since swirled that other Big Pharma players are likewise eyeing the HCV space. And that speculation has helped push up Idenix shares by a hefty 80% and Achillion shares by 45% since the beginning of the year.
At stake is a market filled with a backlog of under-treated HCV patients that many analysts believe could reach $10 billion a year within the next five years.
But here’s the kicker -- because the new HCV drugs can actually cure the disease, their demand will likely drop over time after the backlog of patients is treated. Despite this, most analysts agree the market should be able to coast along at the $10 billion level for at least ten years. And because time is of the essence, companies with HCV drug candidates in mid-to-late stage development have been considered the hottest takeover targets.
Of the two companies, Idenix’s stock has seen the most action largely because its lead drug candidate hails from a highly-touted class of drugs called nucleotides, or “nukes.” Both Inhibitex’s and Pharmasset’s lead drug candidates are nukes, which is what made them particularly attractive acquisitions.
“I don’t think Idenix’s stock’s bid too high,” said Wedbush Securities analyst Duane Nash, who tracks Idenix. “But the caveat is that acquisitions generally take longer than most people anticipate.”
While Wedbush currently has Idenix’s fair market value listed at $15 a share, Nash believes that Idenix could fetch a takeout price of between $20 and $25 a share. The stock closed at $13.39 on Tuesday.
William Blair analyst Katherine Xu, meanwhile, said she believes Idenix’s current takeout range is probably between $15 and $20 a share. Xu currently has a price target of $10 on the stock.
Xu added that she could be raising her target into the mid-to-high teens if and when U.S. regulators give the green light to an Idenix’s clinical trial that has been placed on partial hold over safety concerns. The decision is expected within the next few weeks.
“I doubt people will take it out before the hold is removed,” she said.
But analysts also point out that Novartis AG’s roughly 30% equity stake in Idenix could hinder a takeover bid, especially as the Swiss pharmaceutical giant reportedly has options to some key drug candidates. Meanwhile, JMP Securities analyst Liisa Bayko thinks that investors have overvalued Idenix’s nuke drug candidate, which she says isn’t as potent as those being developed by Inhibitex and Pharmasset. Because of this, Bayko has a sell rating on the stock.
As for Achillion, the reason its shares haven’t been bid up as high as Idenix’s is largely because its lead drug candidate is a protease inhibitor, a class of drugs that includes Merck & Co.’s Victrelis and Vertex Pharmaceuticals’s Incivek, which were both launched last year. Several other drug developers already have protease inhibitors in their pipelines.
Xu said that while she currently has Achillion’s price target at $15 a share, its takeout range is probably between $15 and $20. The stock closed at $11.09 on Tuesday.
“I think it’s still undervalued at the moment,” she said.
Wells Fargo Securities analyst Brian Abrahams said that even though Achillion’s lead drug candidate isn’t a nucleotide, that doesn’t mean it isn’t an attractive acquisition target.
“Certainly nucleotides are an exciting class but they’re not the only class we believe will be used in HCV treatment,” said Abrahams, adding that doctors will be looking to use the drugs in combination to get the best results.
An article here from Market Watch talking to several analysts about possible mergers of Achillion and Idenix. No doubt that the slack of easing sales of Incivek and Victrelis will definitely be picked up by the 2nd and 3rd generation molecules, especially if developers can manage an interferon-free regimen. The HCV drug development space is incredibly hot right now, and with an estimated 170 million people infected, successful drugs are probable cash cows for many years to come.
Feb. 1, 2012, 12:01 a.m. EST
Achillion, Idenix could miss hep-C merger bonanza
By Val Brickates Kennedy, MarketWatch
BOSTON (MarketWatch) -- Investors tantalized by a recent string of lucrative takeover offers for hepatitis C drug-developers shouldn’t assume that an eye-popping bid for Idenix Pharmaceuticals and Achillion Pharmaceuticals is just around the corner, according to biotech analysts.
Both Idenix were put in play earlier this month by news that Bristol-Myers Squibb intends to buy Inhibitex Inc for $2.5 billion in cash.The offer represents a dazzling 163% premium over Inhibitex’s pre-bid closing price.
Bristol’s bid also comes on the heels of two other lucrative takeovers in the hepatitis C virus, or HCV, arena. In October, Roche announced it was paying a stunning 256% premium, or $230 million, for tiny Anadys Pharmaceuticals. That was followed by Gilead Sciences’s whopping $11 bid for Pharmasset Inc., which carried an 89% premium.
Rumors have since swirled that other Big Pharma players are likewise eyeing the HCV space. And that speculation has helped push up Idenix shares by a hefty 80% and Achillion shares by 45% since the beginning of the year.
At stake is a market filled with a backlog of under-treated HCV patients that many analysts believe could reach $10 billion a year within the next five years.
But here’s the kicker -- because the new HCV drugs can actually cure the disease, their demand will likely drop over time after the backlog of patients is treated. Despite this, most analysts agree the market should be able to coast along at the $10 billion level for at least ten years. And because time is of the essence, companies with HCV drug candidates in mid-to-late stage development have been considered the hottest takeover targets.
Of the two companies, Idenix’s stock has seen the most action largely because its lead drug candidate hails from a highly-touted class of drugs called nucleotides, or “nukes.” Both Inhibitex’s and Pharmasset’s lead drug candidates are nukes, which is what made them particularly attractive acquisitions.
“I don’t think Idenix’s stock’s bid too high,” said Wedbush Securities analyst Duane Nash, who tracks Idenix. “But the caveat is that acquisitions generally take longer than most people anticipate.”
While Wedbush currently has Idenix’s fair market value listed at $15 a share, Nash believes that Idenix could fetch a takeout price of between $20 and $25 a share. The stock closed at $13.39 on Tuesday.
William Blair analyst Katherine Xu, meanwhile, said she believes Idenix’s current takeout range is probably between $15 and $20 a share. Xu currently has a price target of $10 on the stock.
Xu added that she could be raising her target into the mid-to-high teens if and when U.S. regulators give the green light to an Idenix’s clinical trial that has been placed on partial hold over safety concerns. The decision is expected within the next few weeks.
“I doubt people will take it out before the hold is removed,” she said.
But analysts also point out that Novartis AG’s roughly 30% equity stake in Idenix could hinder a takeover bid, especially as the Swiss pharmaceutical giant reportedly has options to some key drug candidates. Meanwhile, JMP Securities analyst Liisa Bayko thinks that investors have overvalued Idenix’s nuke drug candidate, which she says isn’t as potent as those being developed by Inhibitex and Pharmasset. Because of this, Bayko has a sell rating on the stock.
As for Achillion, the reason its shares haven’t been bid up as high as Idenix’s is largely because its lead drug candidate is a protease inhibitor, a class of drugs that includes Merck & Co.’s Victrelis and Vertex Pharmaceuticals’s Incivek, which were both launched last year. Several other drug developers already have protease inhibitors in their pipelines.
Xu said that while she currently has Achillion’s price target at $15 a share, its takeout range is probably between $15 and $20. The stock closed at $11.09 on Tuesday.
“I think it’s still undervalued at the moment,” she said.
Wells Fargo Securities analyst Brian Abrahams said that even though Achillion’s lead drug candidate isn’t a nucleotide, that doesn’t mean it isn’t an attractive acquisition target.
“Certainly nucleotides are an exciting class but they’re not the only class we believe will be used in HCV treatment,” said Abrahams, adding that doctors will be looking to use the drugs in combination to get the best results.
Subscribe to:
Posts (Atom)
Posts
