Investors are always on the lookout for untapped opportunities. Looking at the case for BioCryst Pharmaceuticals (BCRX), Oppenheimer’s Justin Kim thinks that the biotech fits the bill, calling it an “underappreciated commercial-stage company with pipeline growth potential.”
At the heart of Kim’s thesis lies Orladeyo, the biotech’s treatment for the prevention of hereditary angioedema (HAE) attacks, which was granted FDA approval in December 2020.
Characterized by unpredictable and possibly life-threatening periodic swelling attacks, the rare disease affects roughly one in 50,000 people. While other products address HAE attacks, they are all delivered either subcutaneously or intravenously, while Orladeyo is administered orally.
This is an appealing trait. While Kim notes that the efficacy of oral agents “has been raised” – including by himself– the analyst believes the “long-term efficacy profile” suggests Orladeyo is a viable option due to its “added convenience.”
The treatment has been showing steady progress since hitting the market. Sales reached $37 million in Q3, up from the $28.5 million delivered in the prior quarter. By 2025, Kim estimates the drug can rake in US peak revenues of ~$617 million. The decent performance comes despite the complications wrought by the pandemic, and Kim thinks “continued execution could bring confidence in the shares and re-rating into 2022.”
Although Orladeyo is the main value driver, the company’s early rare disease pipeline in hematology and nephrology could “further capitalize on the company’s competency” in developing oral agents. Oral Factor D inhibitor BCX9930 leads the way here. The drug is currently being assessed in clinical trials for the treatment of complement-mediated diseases and has been granted both Fast Track status and Orphan Drug Designation by the FDA for the treatment of paroxysmal nocturnal hemoglobinuria (PNH).
Lastly, Kim believes the company could be an appealing target for a bolt on acquisition. “M&A, while not necessary,” says the analyst, “Could be sufficient to substantiate our thesis on this execution-focused story.”
In line with his bullish stance, Kim rates BCRX a Buy, and his $16 price target implies room for 40% upside potential in the next 12 months. (To watch Kim’s track record, click here)
Kim might think there’s an opportunity here but so do most of his colleagues; the stock boasts a Strong Buy consensus rating, based on 6 Buys vs. 2 Holds. Furthermore, the average price target is a confident $18.71, suggesting shares have room for 60% upside over the next 12 months. (See BCRX stock analysis on TipRanks)
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Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
