Wedbush Starts EPIRUS Biopharmaceuticals (EPRS) at Outperform; Sees Massive Opportunity in Biosimilars

After the close of trading Wednesday, Wedbush analyst Heather Behanna initiated coverage on EPIRUS Biopharmaceuticals (NASDAQ: EPRS) with an Outperform rating and a price target of $13.00, calling it an overlooked pure-play in biosimilars.

Behanna said company plans to be in the first wave of biosimilars for blockbuster drugs like Remicade, Humira and Actemra, which had a combined 2013 revenue of approx. $20 billion.

"In our view, Epirus’s concentrated disease focus and strategy of regional partnerships should allow it to bring in revenue, mitigate spend and build out its commercial footprint," the analyst said.

Further, the analyst notes that patent expirations are expected in the next 5 years for biologic drugs such as antibodies that are estimated to represent $60 billion of revenue annually. This, according to the analysts, "creates an opportunity for biosimilars, lower-cost non-branded biologics."

Meanwhile, while the EU has established a regulatory pathway for biosimilars to be approved, the U.S. is still behind. However, the FDA will hold its first antibody biosimilar panel next month, helping clarify a regulatory path in the U.S., the analyst notes. Still, potential legal
battles may delay entry of biosimilars in the U.S. on a case-by-case basis, she adds.

Behanna sees Epirus poised to capitalize on upside from emerging markets with lead candidate BOW015 recently approved in India. "In our view, BOW015 (a Remicade biosimilar) approval validates the Epirus platform," she said. "Epirus successfully completed Phase I and III studies for BOW015, demonstrating its ability to manufacture and develop a biosimilar. The company has moved to a scalable flexible manufacturing system; it will run another pivotal study to set BOW015 up for EU and U.S. filings in 2017."

The analyst also expects pipeline expansion and partnerships should build value for Epirus in the coming year. She believes the company is "undervalued and under the radar." She adds, "incremental BOW015 royalty revenues and advancement of regional partnerships for BOW015 and Humira biosimilar, BOW050, should help Epirus realize value relative to its peers."

For an analyst ratings summary and ratings history on EPIRUS Biopharmaceuticals click here. For more ratings news on EPIRUS Biopharmaceuticals click here.

Shares of EPIRUS Biopharmaceuticals closed at $7.67 yesterday.

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