July 17, 2012 | By John Carroll
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Amicus' market cap at the moment is approx US$4bn. NEU's is approx US$2bn / AUD$3bn. So NEU is at approx 50% MC of Amicus.
Article from 24 Dec 2023 =>> Amicus mentioned up front and Acadia mention further down.
Note that Amicus sales figures are improving but are much lower than Acadia's Daybue sales figures & growth rate / NEU's rapidly growing royalty payment figures. All good for NEU's valuation and share price going forward.https://www.nasdaq.com/articles/time-to-pull-the-trigger-says-morgan-stanley-about-these-2-healthcare-stocks
‘Time toPull the Trigger,’ Says Morgan Stanley About These 2 Healthcare Stocks
December24, 2023 — 06:17 am EST
Writtenby Michael Marcus for
It’s been a bountiful year for thestock market but that doesn’t mean there haven’t been laggards. The biotechindustry, for example, has underperformed. While the Nasdaq Biotechnology Index(NBI) shows a 3% year-to-date gain, that is still some distance below the ’s 24% return.
Therefore, with investor sentimentsubdued, and some SMID-cap biotech firms still needing to raise capital againsta challenging capital markets backdrop, Morgan Stanley’s Jeffrey Hung says thesetup for SMID-cap biotech exiting 2023 seems “daunting.”
That said, there are signs that 2024could offer an improvement, and as such, Hung is “cautiously optimistic forSMID-cap biotech in 2024.”
“Within healthcare, biotech appearsto be more attractive on relative valuation,” the 5-star analyst recently said.
“Healthcare tends to outperform in environments of above trend and fallinginflation, which our economists expect for the near term. The markets implyrate cuts by the Fed in nearly five full 25bp increments over 2024, starting inMay… We still like a core position in mid-cap growth names where there isdownside protection from approved products with substantive revenues butmeaningful upside opportunity when the biotech market returns to rewardinvestors for revenue growth & positive data.”
With a more favorable outlook in tow,and meeting the above criteria, Hung thinks it’s time to pull the trigger on acouple of promising , having recently upgraded his ratings for them. So, we decided to give the pair a closer look. Turns out it’s not only Hung who has confidence in these names; according to the TipRanks database, both are also rated as Strong Buys by the analyst consensus. Let’s see what makes them so.
Amicus Therapeutics ()
The first stock on our MS-backedlist, Amicus Therapeutics, is a biotech research firm focused on developing newpharmaceuticals for the treatment of ‘rare and orphan diseases.’ This class ofdisease conditions is characterized by devastating effects on patients – and bysmall patient bases. For biopharma companies, they present a difficultchallenge: there will be a market for a new drug, but it will be difficult tomake it offset the high overhead incurred in the development process.
Amicus has taken up this challenge,and is working on a line-up of new drug candidates featuring novel modes ofaction – and the company has reached the ‘Holy Grail’ of the biopharmaindustry, achieving approval and commercialization on two new drug therapies.
These are galafold, a treatment for adults suffering from Fabry disease, and acombination therapy, pombility-plus-opfolda, designed to treat Pompe diseaseafter late-onset diagnosis.
Having these approved drugs on themarket gives Amicus a reliable source of income, and the company’s revenueshave been trending upward this year. The bulk of this income comes fromcontinuing sales of galafold, which reached $100.7 million in 3Q23, up 23%year-over-year – and the first time galafold’s total sales exceeded $100million. Sales of the pombility-plus-opfolda combination therapy came to $2.77million; this combo brought in just $60K in the prior-year quarter.
At the bottom line for the thirdquarter, Amicus reported a net loss per share of $0.07, based on a total netloss of $21.6 million. This was the lowest net EPS loss Amicus has reported,and beat the forecast by a penny. The company anticipates showing non-GAAPprofitability in the 4Q23 report.
For Morgan Stanley’s Hung, this addsup to a solid choice for investors. He is impressed by Amicus’ ability to shifttoward net profits, and writes, “We expect the company to reach non-GAAPprofitability by year-end, and the company has achieved each of its major goals(such as approval of Pombiliti + Opfolda) over the last year. Looking ahead,focus remains on the Galafold and Pombiliti + Opfolda launches, for which wethink Amicus is well-positioned. We significantly cut our R&D expenses aswe believe development expenses for the company's early stage pipeline willremain fairly limited for the next 12-18 months.”
Accordingly, Hung upgraded FOLDshares from Equal-weight (i.e., Neutral) to Overweight (Buy) while his $20price target points toward a one-year upside potential of 47%. (To watch Hung’strack record, .)
Amicus has a Strong Buy rating fromthe Street’s analyst consensus, based on 7 unanimously positive reviews. Theshares are currently trading for $13.60, and the $19.71 average target pricesuggests that FOLD will appreciate by 45% in the year ahead. (See .)
Acadia Pharmaceuticals ()
The second Morgan Stanley pick we’lllook at is Acadia Pharmaceuticals, a biotech researcher working on treatmentsfor disorders and diseases of the central nervous system. Like Amicus above,Acadia has reached the commercialization stage, with two approved drugs on the market,and is pursuing an active research pipeline, featuring new applications of theapproved drugs and several new drug candidates.
The first of Acadia’s approvedmedications is pimavanserin, branded as nuplazid, an atypical antipsychoticdrug currently approved for the treatment of psychosis – delusions andhallucinations – that are associated with Parkinson’s disease. The drug wasfirst approved in 2016, and in the recently reported 3Q23 it generated netproduct sales of $144.8 million. For the first three quarters of 2023, sales ofnuplazid reached $405.3 million, up 6.5% year-over-year.
Acadia is continuing to studypimavanserin in its clinical trial program. The company recently reportedpositive results from the Phase 2 ADVANCE study, which focused on using thisatypical antipsychotic as a treatment for ‘negative symptoms of schizophrenia.’Currently, pimavanserin is the subject of the ADVANCE-2 study, a Phase 3 trialof the drug in the treatment of schizophrenia. Top line results are expectednext year.
In other important news aboutnuplazid, Acadia earlier this month won a patent lawsuit in the FederalDistrict Court in Delaware. The case was based on two suits which were filedlast October, and alleged that copies of nuplazid being put on the marketviolated Acadia’s copyright. The company won the suit in a summary judgement,and shares in ACAD jumped 32% on the news.
The second approved drug in Acadia’sportfolio is trofinetide, approved earlier this year as a treatment for Rettsyndrome. The drug has been branded as daybue and is on the market for thetreatment of Rett in adults and in pediatric patients over age 2. Daybuereceived FDA approval this past March, and launched commercially shortlythereafter. The drug is already generating significant income for Acadia;product sales in 3Q23 came in at $66.9 million.
In his coverage of this stock, topanalyst Hung notes several of these factors as supportive for ACAD shares,writing, “We upgrade ACAD shares to Overweight (from Equal-weight) as webelieve the Daybue launch is likely to remain strong. While management expectsthe launch to be more linear going forward, we are encouraged by the marketopportunity and think the company will be able to identify more patients andcontinue to grow the Rett syndrome diagnosed population. In addition, lastweek's court ruling in favor of Acadia on the Nuplazid patent challenge removesa significant headwind that had been a focus amongst many investors.”
Our PT goes to $40 (from $31) fromraising our market share estimates for Daybue in Rett Syndrome to 50% peakshare (from 40%).”
Along with the rating upgrade, Hung’sprice target goes from $31 to $40, implying a potential upside here of 27% onthe one-year horizon.
This biotech has picked up 16 recentanalyst reviews – and these include 12 Buys over 4 Holds, to support the StrongBuy consensus rating. ACAD boasts a $34.20 average target price, which suggestsa 9% increase from the current trading price of $31.40. (See .)
To find good ideas for stocks tradingat attractive valuations, visit TipRanks’ , a tool that unites all of TipRanks’ equity insights.
Disclaimer: The opinions expressed inthis article are solely those of the featured analysts. The content is intendedto be used for informational purposes only. It is very important to do your ownanalysis before making any investments.
