Goldman Sachs Upgrades InterMune Inc. (ITMN) to Buy

March 11, 2014 6:49 AM EDT
Get Alerts ITMN Hot Sheet
Price: $73.89 --0%

Rating Summary:
    8 Buy, 9 Hold, 0 Sell

Rating Trend: = Flat

Today's Overall Ratings:
    Up: 29 | Down: 34 | New: 45
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Goldman Sachs upgraded InterMune Inc. (NASDAQ: ITMN) from Neutral to Buy with a price target of $45.00 (from $40.00), suggesting 34% upside.

Analyst Terence Flynn said, "In late February, ITMN reported better-than- expected top-line Ph3 data for key drug, Esbriet for IPF (an orphan lung indication), which in our view de-risks the US opportunity (we model $1.3bn US peak). Despite the recent outperformance (128% YTD vs. 15% NBI), we still see valuation as attractive with shares trading at $2.9bn EV (or 1.6x WW peak). Our conversations with investors suggest outstanding concerns regarding Esbriet’s efficacy (treatment effect size) as well as the competitive landscape."

Looking at the next catalyst, the firm expects InterMune and competitor Boehringer Ingelheim to present full Phase 3 data from their respective IPF programs at the ATS conference. They also see upside to ITMN’s filing timelines (guidance of early 3Q could be conservative) and Esbriet pricing (we raise our projection to $75k from $60k per year).

Goldman's options team also recommends buying ITMN July call spreads for the ATS Conference.

The firm raised FY 2015 EPS from ($0.32) to ($0.04) and FY 2016 EPS from $1.02 to $1.56.

For an analyst ratings summary and ratings history on InterMune Inc. click here. For more ratings news on InterMune Inc. click here.

Shares of InterMune Inc. closed at $33.64 yesterday.


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