Oppenheimer raises price target for Strongbridge Biopharma to US$15 citing its rare disease assets

Analysts at Oppenheimer raised their price target Tuesday on Strongbridge Biopharma plc (NASDAQ:SBBP) citing the fact that the biotech has two strong commercial rare disease assets with a third in the pipeline.

The Trevose, Pennsylvania-based commercial stage biotech has started marketing its drug Keveyis, which treats primary periodic paralysis, a rare neuromuscular disorder, as well as its drug Macrilen, which takes aim at adult growth hormone deficiency (AGHD), an endocrine disorder. It is worth noting that Macrilen is the only FDA-approved new prescription oral solution used in the diagnosis of patients with AGHD.

The biotech also reported favorable results from a pivotal Phase 3 trial that evaluated its drug Recorlev for the treatment of Cushing’s syndrome, that occurs when levels of the hormone cortisol are too high.

Oppenheimer lifted its price target on Strongbridge to US$15 from US$12.

“We rate Strongbridge Biopharma Outperform with a US$15 price target. The company now has two commercial rare disease assets: Keveyis  and Macrilen, with Recorlev close behind in pivotal Phase 3 studies for Cushing’s syndrome,” wrote Oppenheimer analysts Hartaj Singh and Emma Nealon.

READ: Strongbridge Biopharma shares rise on favorable Phase 3 trial results for Cushing’s syndrome drug

“The ability of the highly focused, strategic and experienced management team to scale the Keveyis and Macrilen revenues while preparing for Recorlev launch by late 2019 end/early 2020E (we assume 2020E) is key to significantly re-rating the company. We believe management is poised to execute on this strategy, and we are bullish on the story,” they added.

Shares of Strongbridge Biopharma closed 4.6% higher to US$6.28 Tuesday.

The analysts said key takeaways from their survey of 25 high-prescribing endocrinologists showed there is a “high unmet need” for a safe and effective prescription oral solution like Macrilen that is used to test for adult growth hormone deficiency.

“Our survey clearly highlights an AGHD testing market with a high unmet need due to suboptimal current tests and a clearly superior and approved, on-label Macrilen product profile,” wrote the analysts.

“We believe our current $2/share Macrilen valuation is conservative, and rapid uptake, increasing overall AGHD testing and pricing power (fewer rebates/discounts) could make this franchise worth 3X to 4X more. We await visibility,” they added.

Contact Uttara Choudhury at [email protected]

Follow her on Twitter: @UttaraProactive 

Story by ProactiveInvestors