Oppenheimer view upbeat: ‘Bizarre time’ for financings, ‘few extra months’ stay



By way of Randy Osborne
Group of workers Author

All the way through a up to date convention name by way of Oppenheimer & Co. to advise traders about what is forward and indicate treasured names within the sector, analyst Hartaj Singh took a high-altitude view, calling this “a peculiar time” for elevating cash when in comparison to developments in earlier eras.

“There is been a large number of research on Wall Boulevard and in media concerning the IPO and the secondary [offering] window that is been open during the last yr, and what is the that means of that,” Singh mentioned. “We have now been accruing information in this, however usually talking, in case you have IPO-secondary home windows that keep open for a very long time, the field efficiency has a tendency to lag after you hit a height. No one would argue that [today] the biotech sector is hitting a excessive adore it did in 2015, and then the IPO-secondary window closed for some time. The field is indubitably underrated, but the IPO and secondary window continues to stick open.” He had no clarification however mentioned that “we are nonetheless most likely excellent for a couple of extra months.”

In the meantime, Singh and others on personnel named some best alternatives. Esther Rajavelu, new to the staff, singled out Washington-based Vanda Prescription drugs Inc., which markets the melatonin receptor agonist Hetlioz (tasimelteon) for non-24-hour sleep-wake dysfunction (N24SWD), a situation affecting as much as 70 % of people who find themselves utterly blind, whether or not they had been born blind or turned into so later in existence. Calling Vanda “a captivating identify to stay to your radar,” she famous that “control has highlighted psychiatric sufferers as key expansion drivers and we’ve got accomplished some proprietary paintings and walked away feeling lovely excellent concerning the uptake amongst this prescriber workforce.”

In early October, Rajavelu reported on a brief ballot accomplished by way of Oppenheimer of psychiatrists. “The bulk (84 %) who went throughout the screening procedure for our survey deal with in settings the place greater than 25 % of sufferers revel in sleep issues,” she wrote. “Importantly, 46 % of those psychiatrists have prescribed Hetlioz. On moderate, our respondents identified 13 % of sleep problem sufferers with circadian sleep-wake issues (together with N24SWD), about 14 % with parasomnias, 14 % with obstructive sleep apnea, nine % with narcolepsy, and 49 % with insomnia.” About 52 % of the sufferers that respondents deal with with Hetlioz are sighted, she mentioned, and the docs mentioned that 64 % in their Hetlioz-treated sufferers are extremely or modestly attentive to medicine, whilst 15 % are nonresponsive. About 21 % falls into the “too quickly to inform” class. “Remark from our survey respondents means that prescribers usually understand Hetlioz (1) as non-addictive with a positive protection/aspect impact profile relative to different sleep brokers, and (2) could also be widely appropriate to sufferers with sleep disturbances who’re nonresponsive or in part attentive to different sleep treatments,” she wrote.

Within the Vanda pipeline, Rajavelu likes tradipitant, a small-molecule neurokinin 1 receptor antagonist in section II trials for gastroparesis, which she thinks has a 45 % likelihood of good fortune. “Recall that during an previous trial in atopic dermatitis, the compound didn’t meet statistical importance, so we’re being wary in this one,” she mentioned. “Having mentioned that, from a inventory standpoint, we do not assume the corporate is getting a lot credit score for this asset.” No licensed remedy exists for gastroparesis, so the FDA will most likely need a greater section III trial if the section II pans out. Therefore, the latter effects constitute “a scientific catalyst for the close to time period however no longer essentially a business needle mover,” she mentioned.

Exelixis going robust

Singh mentioned that his company, going into the 1/3 quarter and the top of the yr, makes a speciality of firms which might be “catalyst-oriented on this choppiness” in efficiency throughout huge, small and mid-cap corporations. He likes Alexion Prescription drugs Inc., of New Haven, Conn., the place “the economic trade is buzzing,” he mentioned. “They have got overwhelmed income the remaining 9 quarters in a row, they have got raised steerage in 4 out of the remaining 5 quarters. The control staff is executing.”

A few of the advertised choices is supplement C5-targeting Soliris (eculizumab) for a number of indications. “Soliris is a mission on its own,” he mentioned, and in coming quarters the drug’s expansion fee will “get started appearing via unambiguously, with the exception of scientific trial prices which it needed to face.”

Referring to Silver Spring, Md.-based United Therapeutics Corp., he mentioned the present yr is excellent for gross sales and income expansion, and United is price proudly owning as “the most cost effective biotech inventory available in the market.”

Singh additionally discussed Foster Town, Calif-based Gilead Sciences Inc. and Sarepta Therapeutics Inc., of Cambridge, Mass., either one of which he’s “a bit of extra wary” about. “Sarepta must have a robust 1/3 quarter, however persons are fascinated by their pivotal plans for gene remedy and the beginning of that by way of year-end,” he mentioned. “We predict the chance of [success] is 15 % or much less in line with historic FDA information on speeded up approvals.”

A little bit over every week after Oppenheimer’s name, Sarepta reported third-quarter gross sales of Exondys 51 (eteplirsen) for Duchenne muscular dystrophy of $78.five million.

With regards to Gilead, Singh mentioned he “in truth like[s] the setup going to the year-end, it is simply that they have were given to get a brand new CEO on board,” and be informed whether or not contemporary management will wish to pursue different analysis spaces or persist with Gilead’s conventional knitting. “That does create some loss of visibility, which must transparent up by way of the top of the yr,” he mentioned.

Additionally discussed: Boston-based Vertex Prescription drugs Inc. and Regeneron Prescription drugs Inc., of Tarrytown, N.Y., each “basically going via a re-rating,” Singh mentioned. Vertex could have a “scientific yr” in 2019, while Regeneron can be about product launches. “We consider that the ones are two names that it’s a must to personal” subsequent yr, he mentioned.

Analyst Leah Cann had favorable issues to mention about Summit, N.J.-based Celgene Corp. “We predict there may be excellent information go with the flow popping out for the remainder of this yr and the primary part of subsequent yr,” she mentioned. “We’d be expecting the corporate to proceed to place out excellent income expansion.”

Exelixis Inc., of Alameda, Calif., is due for “a near-term acclaim for the lead compound in its moment indication, most likely by way of the top of the yr,” and he or she mentioned the corporate most probably will “proceed to satisfy or beat expectancies on gross sales of the drug going via the remainder of this yr.” That drug is Cabometyx (cabozantinib), licensed for complex kidney most cancers and looking ahead to a choice in second-line liver most cancers, with a PDUFA date of Jan. 14, 2019.

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