When a small drug company’s surges almost 52% in a single day after releasing impressive clinical trial results for a potentially revolutionary class of drugs, should investors cash in or go all in?
In the case of Alnylam Pharmaceuticals (ALNY), the answer depends on which sell-side analyst happens to be speaking.
Instinet’s Christopher Marai advises investors to “sell on the data.” The strong late-stage study results released yesterday for the company’s Patisiran therapy, a RNAi therapeutic, are already baked into the stock price, which sat almost unchanged today at $113.52 a share.
But others see more upside for the stock.
Cowen’s Ritu Baral lifted his price target to $117 a share from a $93 a share. Credit Suisse’s Alethia Young now sees the stock climbing to $123 over the next year, up from the previous target of $96 a share, arguing that Patisiran sales could peak by 2023 at $1.5 billion.
As Young writes:
...we think these estimates could be higher if patisiran is able to fully penetrate the eligible cardiac population and think the drug could sell up to $2B at peak (DCF would be $161). Additionally, we think registrational data for givosiran in porphyria expected in mid-2018 is a major value driver for the company. We have raised our probability of success to the program from 60% to 75% since we feel the primary endpoint for porphyria looks fairly achievable based on prior studies. Alnylam has faced substantial investor skepticism over their platform's safety and efficacy profile, but we think the company could be entering a new chapter in 2018 as it transitions to a commercial stage company.
And at Barclays, Gena Wang handicapped the likelihood of Patisiran’s success at 95%, up from a previous 85%. She also lifted her price target from $105 a share to $127 a share, predicting that there is more to come from the company’s pipeline.
We continue to see meaningful potential from ALNY pipeline programs such as fitusiran in hemophilia, which we believe has been overlooked after the dosing suspension (likely resumption in late-2017).