By Ben Levisohn
SunTrust Robinson Humphrey’s Edward Nash and team offer five biotech stocks for the next six months:
Cempra (CEMP) ($50 PT), our top pick based on near-term clinical and commercial success potential. We recently met with management and it was reiterated that the second Phase III study of solithromycin in CABP (SOLITAIRE-IV) remains on track to report top-line data by YE15. We assign a probability of success of 80% to the overall solithromycin program based on the positive data from the first Phase III clinical trial (SOLITAIRE-Oral)
Tetraphase Pharmaceuticals (TTPH) ($48 PT), an antibiotic player with an imminent data readout. Top-line data from the pivotal portion of the Phase III cUTI study is expected in 3Q15 and management plans to submit an NDA by YE15. We model a probability of success of 90% based on the positive data from the lead-in portion of the Phase III and believe eravacycline may demonstrate superiority to active comparator levofloxacin although the trial is designed for non-inferiority. The targeted indications of multi-drug resistant Gram negative bacterial infections is a major unmet medical need and eravacycline has a differentiated clinical profile as compared to existing competitors
Intra-Cellular Therapies (ITCI) ($50 PT), clinical program on track to target a Blockbuster market. The first pivotal Phase III study of ITI-007 for schizophrenia has completed patient enrollment and will report top-line data in 2H15. The first Phase III study has same ITI-007 dosage, treatment period, primary and secondary endpoints as the completed Phase II study which reported positive top-line data in December 2013, but with an increased number of patients, so stronger statistical powering
Catalyst Pharmaceuticals (CPRX) ($7 PT), competition has been over-stated. A rolling NDA submission for Firdapse will begin in 3Q15 and will be completed in 4Q15; priority review based on the Breakthrough Therapy designation. Management guided that the Chief Commercial Officer position will be filled by October 1st, if not sooner, most likely by a candidate ideal for an Orphan launch. Commercial preparation is ongoing with three MSLs hired; a fourth may be hired by fall; sales reps will be in place by end of 1Q16 preceded by sales managers. Top-line data from an Investigator sponsored study of CPP-109 for Tourette’s disorder in 2Q15 and topline data from a Phase I(b) multiple dose safety and tolerance study of CPP-115 in 3Q15, if positive, should also drive stock price appreciation
Sarepta Therapeutics (SRPT) ($33 PT), the FDA will continue to be the major influencing factor. The rolling NDA submission will be completed in mid-2015. The DMD guidelines that the FDA released last week suggests that the Agency is actively engaged in making treatment options available to patients; the comments on dystrophin as an potential surrogate endpoint are positive for Sarepta Therapeutics.
Shares of Sarepta Therapeutics have gained 3.6% to $29.33 at 11:45 a.m. today, while Catalyst Pharmaceuticals has dropped 0.8% to $3.94, Intra-Cellular Therapies has risen 3.5% to $27.48, Tetraphase Pharmaceuticals has ticked up 0.3% to $42.76, and Cempra has advanced 1.3% to $32.92.
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