Tesaro (TSRO) PT Raised to $122 at Credit Suisse
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Credit Suisse analyst Alethia Young reiterated an Outperform rating and boosted her price target on Tesaro (NASDAQ: TSRO) to $122.00 (from $90.00) saying the big takeaway on Tesaro data is that it works broadly in all 2L ovarian populations and safety looks solid. They also think the robustness of this data bodes well from PRIMA and QUADRA but are maintaining our POS here. They also looked at their model and also adjusted durations in first-line.
Young commented, "We think Tesaro remains one of the most attractive and de-risked cancer assets in our landscape and the company has been cited in major press sources as a takeout target (Bloomberg, Investor Business Daily). Ex M&A, our DCF remains at $90/sh. We have built an M&A DCF model to capture what we think may drive upside to the story in the near-term. In our base case, we assume synergy cuts to SG&A of 50% and 20% to R&D and a 25% tax rate. We still think further upside to valuation in the long-term comes from 1) PARP expansion in other platinum sensitive tumors, 2) potential HRD- sales in 1L as we expect the company will amend the protocol, 3) readouts in breast cancer PARP studies in '17, and 4) immuno-oncology where we expect early data over 2017."
Shares of Tesaro closed at $99.26 yesterday.
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