@redpencil,
You're referencing commentary from a stockbroking analysts - in 2016 - that makes predictions about possible share price reactions - in both percentage and nominal dollar terms - to varying scenarios of trial outcomes.
And under all of those share price responses the share price would still end up at levels that are all of the order of magnitude of
half of the current share price.
How much merit do you think one can today afford that kind of analysis, and its accompanying Underperform recommendation with target prices ranging from $1.01/share to $122/share? (See
[*] below for fuller extract of the article)
The degree of analytical ineptitude is nothing short of eye-watering.
I would sooner take my investing cues from a troop of monkeys that from over-paid and incompetent stockbroking analysts.
[*]
The move forward to clinical development and commercialisation is dependent on the outcome of these end points. Tolerance of the product is largely expected and Morgan Stanley envisages a positive reaction in the stock of around 7% on a positive primary end point. The secondary end point, in terms of the recurrence of heart attacks, is more challenging and the broker is less certain, given only four months of follow-up and a relatively small study population.
A significant secondary signal would be a major positive surprise and the broker expects a reaction in the stock of around 17% is possible, although it would require validation in a phase III trial. The treatments addressing the unmet clinical need in heart disease are competitive and, the broker notes, competitor Amgen will present its full data from its Repatha study at the conference.
There are three probable outcomes from the conference, Morgan Stanley deduces. The first is if the data misses both end points, which would hit the shares by around 3% to the downside, in the broker's calculations. If the data meets the primary end point, but there is no secondary signal, this means it may proceed to a phase III, and Morgan Stanley envisages upside to its $101 target, to $111.
The best scenario is where the data hits both the primary end point and provides a good secondary signal, confirming the move to phase III. This is where the broker envisages 17% upside to its target, to $122, although the premium recedes slowly because of the long trial duration and likely new competitive developments. Morgan Stanley retains an Underweight rating.
(20min delay)