Aegis Capital Affirms SciClone Pharma (SCLN) at 'Buy' Following New Agreement with Medicines Co. (MDCO)

Aegis Capital affirms SciClone Pharma (Nasdaq: SCLN) at Buy with a price target of $10 following news that it and the Medicines Company (Nasdaq: MDCO) had established a strategic partnership that granted SciClone a license and the exclusive rights in China (excluding Hong Kong and Macau) to promote two cardiovascular products of the Medicines Company.

Analyst Yi Chen commented, These two products, Angiomax (bivalirudin) and Cleviprex (clevidipine), have been marketed in the U.S. Angiomax is waiting for marketing approval by the China Food and Drug Administration (CFDA), while Cleviprex still has a clinical trial that needs to be done in China. We note that in addition to net sales royalties, the agreement also contains an aggregate of $50.5 million fees payable to the Medicines Company, which include an upfront payment, a product support services fee, and regulatory/commercial success milestone payments.

Angiomax is an injected anticoagulant for patients undergoing percutaneous coronary intervention (PCI) with provisional use of glycoprotein IIb/IIIa inhibitor (GPI) and patients with heparin-induced thrombocytopenia and thrombosis syndrome (HIT/HITTS) undergoing PCI. We note that the Medicines Company is estimated to achieve $600mm in Angiomax sales in 2014. We believe peak sales of Angiomax in China could reach $100mm per year. A Phase 3 registration trial has been completed in China and is currently under review by the CFDA for marketing approval. We believe this drug may potentially get approval in late 2017 or 2018. Cleviprex, as injectable emulsion, is a dihydropyridine calcium channel blocker indicated for the reduction of blood pressure when oral therapy is not feasible or desirable. The clinical trial application (CTA) for China was filed in 2013. SciClone will cover the cost of the clinical trial. We believe this drug could be on the market in or after 2020. With over 400,000 PCIs performed annually and a large and growing anti-hypertensive market in China, these two products may potentially become the leaders in their respective space for hospital use, in our view, and bring in significant revenue streams for SciClone in the long run.

We believe that sales of Zadaxin are likely to be solid for the foreseeable future in the treatment for severe hepatitis and cancers, and keep growing at an annual rate of approximately 15%. Additionally, DC Bead for the treatment of liver cancer is expected to be launched in 1H 2015, following the firm’s business strategy to have a steady stream of products coming online to drive revenue and profitability.

For an analyst ratings summary and ratings history on SciClone Pharmaceuticals click here. For more ratings news on SciClone Pharmaceuticals click here.

SciClone Pharmaceuticals closed at $9.07 yesterday.

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