Intra-Cellular Therapies (ITCI) PT Cut to $29 at Leerink Partners Amid ITI-007 Failure
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Leerink Partners analyst Seamus Fernandez slashed his price target on Intra-Cellular Therapies (NASDAQ: ITCI) to $29.00 (from $95.00) but maintained an Outperform rating on the disappointing result that ITCI's leading drug candidate, ITI-007, failed to separate from placebo in the second Ph 3 schizophrenia study. Neither the 60 nor the 20mg arm differed from placebo on the primary endpoint (PANSS) total score; however, the 4mg risperidone active control arm showed a significant improvement.
Fernandez commented, "ITCI mgmt attribute the study failure to an "unusually high" placebo response. Furthermore, mgmt indicated that with 2 out of the 3 large studies of ITI-007 in schizophrenia demonstrating clear efficacy (Ph2 and 1st Ph3 trials), the company will work with FDA to discuss next steps, including a pot'l regulatory path for ITI-007. We believe the after-market stock reaction, trading at near cash (~$13-14/shr; ~$442M cash and equivalent at the end of 2Q16), is overdone. With a pot'l option to file and Ph3 trials in other CNS indications underway (e.g., bipolar depression and behavior disturbances), we believe that ITI-007 should not be assumed dead as the stock price implies."
Shares of Intra-Cellular Therapies closed at $42.35 yesterday.
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