Deutsche Bank Reiterates Buy on Achillion Pharmaceuticals (ACHN)

Deutsche Bank reiterated a Buy rating on Achillion Pharmaceuticals (NASDAQ: ACHN) with a price target of $17. Comments follow news Johnson & Johnson (NYSE: JNJ) announced a definitive agreement to acquire Alios BioPharma. Analyst Alethia Young thinks the Ph2 RSV asset was the core driver of the deal -- although they have a nuke that is not as far along as Achillion's.

"Alios recently presented at the HCV special conference some preclinical data with a new uridine nuke. Preclinical programs like the Alios nuke still have quite a bit of risk in the world of HCV development. What is notable is that Alios used to be Vertex's partner in HCV before the program ended due to elevated liver labs seen in longer durations of use in Ph2. Also note that Alios is a nuke platform company," said Young.

"We think the Alios program is still far away commercially even if this moves into clinic," added the analyst. "JNJ had $900M in quarterly sales with their HCV protease combined with Gilead's nuke. This combo is off-label and likely will get limited use after Gilead's all oral is approved in early Oct. Alios plans to start their Ph1 program around year end with nuke so at fastest would give ACHN around a 9-month lead. We think developers will look for Ph2 ready assets in the next 12 mos which was the case for Idenix. We still view Achillon's data readout in Ph1 is a highly relevant catalyst and with a meaningful lead over competitors. If the Ph1 data is positive, we still see this asset as an impt strategic asset."

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

Shares of Achillion Pharmaceuticals closed at $10.77 yesterday.

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