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UPDATE: Puma Biotechnology (PBYI) Price Target Raised to $292 at Citi, Stock Seen as Attractive Take-out Candidate

July 23, 2014 8:25 AM EDT
Get Alerts PBYI Hot Sheet
Price: $4.66 --0%

Rating Summary:
    5 Buy, 6 Hold, 4 Sell

Rating Trend: = Flat

Today's Overall Ratings:
    Up: 8 | Down: 5 | New: 36
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(Updated - July 23, 2014 8:49 AM EDT)

Citi maintained a Buy rating on Puma Biotechnology (NYSE: PBYI) and raised its price target to $292.00 (from $99.00). Analyst Yaron Werber views its ExteNet trial as a game changer for the stock.

"Today Puma announced positive 3yr results from the adjuvant ExteNET trial. This data represents a best case scenario similar to our “Raging Bull” case outlined in our Crossroads note. Puma expects to file in adjuvant HER2+ breast cancer in H1:15 with expected approval in 2016. Given an 85% probability of approval, and 50% US and 40% EU peak penetration in adjuvant therapy, we arrive at a $292 new TP based on DCF using an 8% discount rate," said Werber.

"We believe that these estimates are conservative and our $4.1B peak sales estimates across all lines of breast cancer could have upside (fig 1). Although Roche estimates that Herceptin penetrates >90%-95% of the adjuvant breast cancer market, we anticipate lower neratinib uptake as the ExteNET study enrolled more severe patients. But our estimates are likely overly conservative as neratinib has no competition and its diarrhea side effect is likely manageable. Every 5% higher penetration in adjuvant therapy boost our TP by +$26-$46 based on 8%-10% discount rate. We view Puma to be an attractive take out candidate in H2:14 or 2015," he added.

For an analyst ratings summary and ratings history on Puma Biotechnology click here. For more ratings news on Puma Biotechnology click here.

Shares of Puma Biotechnology closed at $59.03 yesterday.



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