Baird Continues to Recommend Affymax (AFFY) Ahead of Tomorrow's PDUFA Date
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Rating Summary:
3 Buy, 3 Hold, 0 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 13 | Down: 14 | New: 11
Rating Summary:
3 Buy, 3 Hold, 0 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 13 | Down: 14 | New: 11
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Baird is reiterating its Outperform rating and $15 price target on Affymax, Inc. (NASDAQ: AFFY) and continues to recommend purchase into Tuesday's PDUFA date.
Despite waning investor patience and an urge to take profits, the stock should continue to be owned, Baird's analyst argues.
"With shares up ~130% since peginesatide's positive December ODAC vote (NBI +20%), we sense growing investor uncertainty on what to do with the stock in front of tomorrow's peginesatide PDUFA," analyst Christopher Raymond comments. "While we understand the urge to declare victory, we do think history offers promising insights for a dialysis launch with product attributes like those of peginesatide."
Raymond estimates chances of FDA approval at approx. 80%. Next, focus will turn to to the launch. He looks at the launch of AMAG's Feraheme as an example.
Like Feraheme (initially), peginesatide will face a well-entrenched competitor and is differentiated primarily on dosing convenience and physician profit, the analyst notes. "Recall, CMS' former cost+6% reimbursement initially provided a sizeable profit incentive favoring Feraheme. While bundling essentially cut Feraheme's launch off at the knees, the incentives favoring peginesatide (cost savings) stand to be at least as meaningful; this time with more durability." Differences actually favor peginesatide, he notes. Data show that ESAs are used more prevalently than IV irons in dialysis patients. Also, Feraheme's premium price-derived profit advantage was but a fleeting benefit for a market preparing to transition to a bundled payment system. "No such headwind exists for peginesatide," he said. Assuming a similar trajectory as Feraheme, revenue for peginesatide could look more like $3M, $17M and $27M, respectively, in the first three quarters.
While not raising numbers right now, Raymond said a price higher than $15 per share is warranted.
For an analyst ratings summary and ratings history on Affymax, Inc. click here. For more ratings news on Affymax, Inc. click here.
Shares of Affymax, Inc. closed at $13.42 yesterday.
Despite waning investor patience and an urge to take profits, the stock should continue to be owned, Baird's analyst argues.
"With shares up ~130% since peginesatide's positive December ODAC vote (NBI +20%), we sense growing investor uncertainty on what to do with the stock in front of tomorrow's peginesatide PDUFA," analyst Christopher Raymond comments. "While we understand the urge to declare victory, we do think history offers promising insights for a dialysis launch with product attributes like those of peginesatide."
Raymond estimates chances of FDA approval at approx. 80%. Next, focus will turn to to the launch. He looks at the launch of AMAG's Feraheme as an example.
Like Feraheme (initially), peginesatide will face a well-entrenched competitor and is differentiated primarily on dosing convenience and physician profit, the analyst notes. "Recall, CMS' former cost+6% reimbursement initially provided a sizeable profit incentive favoring Feraheme. While bundling essentially cut Feraheme's launch off at the knees, the incentives favoring peginesatide (cost savings) stand to be at least as meaningful; this time with more durability." Differences actually favor peginesatide, he notes. Data show that ESAs are used more prevalently than IV irons in dialysis patients. Also, Feraheme's premium price-derived profit advantage was but a fleeting benefit for a market preparing to transition to a bundled payment system. "No such headwind exists for peginesatide," he said. Assuming a similar trajectory as Feraheme, revenue for peginesatide could look more like $3M, $17M and $27M, respectively, in the first three quarters.
While not raising numbers right now, Raymond said a price higher than $15 per share is warranted.
For an analyst ratings summary and ratings history on Affymax, Inc. click here. For more ratings news on Affymax, Inc. click here.
Shares of Affymax, Inc. closed at $13.42 yesterday.
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