Medivation Inc. (NASDAQ: MDVN)
> Share price: $54.98
> Market value: $4.08 billion
Medivation’s consensus price target is $67.53 and its 52-week trading range is $22.46 to $58.83. If the consensus target is right, this implies 23% upside over the next year. After an expected sales gain of close to 200% to about $174 million in 2012, the sales expectation is for about 17% growth to almost $205 million in 2013. Unfortunately, the loss is expected to widen out to $0.89 per share in 2013, versus a $0.65 per share loss expected in 2012. Since shares have more than doubled in 2012 to all-time highs, and with this having been public since the late 1990s, some investors may feel as though the big gains have been seen here. The big development was XTANDI getting approved in 2012 for the treatment of metastatic castration-resistant prostate cancer for those who have been previously treated with Docetaxel. Medivation’s Enzalutamide, in collaboration with Astellas, is in various phases of study for prostate cancer and breast cancer.
Onyx Pharmaceuticals Inc. (NASDAQ: ONXX)
> Share price: $80.83
> Market value: $5.43 billion
Onyx is off to a strong start in 2013 with gains of nearly 10%. Its consensus price target of $100.76 implies upside of about 22%. We would note that the 52-week trading range is $35.73 to $93.18, so that analyst target price is about 10% above its 52-week and all-time high. Shares recently hit an all-time high, and Onyx has been public since 1996. Onyx shares have risen handily in 2012 versus prior years, but the expectation is that 2012 sales will be down 23% to $344.5 million. The trick is that sales are expected to grow by more than 50% in 2013 to almost $540 million. Unfortunately, the positive earnings of 2011 are expected to be followed by losses in 2012 and in 2013. Even if the consensus price target of almost $101 seems high, UBS started coverage with a Buy rating and a $97 price target in December. Onyx’s Nexavar and Kyprolis are for cancer treatments already, but the company is looking for expanded uses. Onyx also has a clinical development pact with Pfizer Co. (NYSE: PFE) in Phase II studies.
Theravance Inc. (NASDAQ: THRX)
> Share price: $21.72
> Market value: $2.13 billion
Theravance’s consensus price target is $30.33 and its 52-week trading range is $12.91 to $31.87. If the consensus target is right, then there is close to 35% upside over the next year. Theravance remains unknown to many investors. Its revenues are spotty, with expectations of $133.7 million in 2012 and it is expected to drop to $40.7 million in 2013. The company’s VIBATIV is a competing treatment for Cubist’s Cubicin against MRSA. The product pipeline is the real story here, with targets against respiratory issues, bacterial infections, central nervous system and pain management, and gastrointestinal motility dysfunction. This stock has pulled back and has now settled in the low-$20s, but its true peak was around $35 back in 2007. With analysts still expecting losses for the foreseeable future, Theravance remains a pipeline story rather than a product story.
ViroPharma Inc. (NASDAQ: VPHM)
> Share price: $25.10
> Market value: $1.65 billion
ViroPharma’s consensus price target is $34.77 and its 52-week trading range is $19.02 to $33.17. If the consensus target is right, this implies more than 38% upside over the next year. Cinryze for the treatment of Hereditary Angioedema is the focus right now, after getting approved in Europe and after having been approved by the U.S. Food and Drug Administration. It also has Vancocin for the treatment of clostridium difficile and Buccolam to treat seizures, both approved in the United States. The next big hope here is Plenadren for the treatment of adrenal insufficiency in adults, which could be a huge win if it lives up to expectations. ViroPharma shares have been much higher lately than they are now, but this is up from the depths of panic from 2003 to 2005 when it had a questionable future. Sales are expected to be down about 20% in 2012, but growing by almost 10% in 2013 to $467.5 million. Unfortunately this is a 2014 to 2017 recovery, because ViroPharma’s valuation is now about 65-times its expected 2013 earnings.
VIVUS Inc. (NASDAQ: VVUS)
> Share price: $14.43
> Market value: $1.45 billion
VIVUS’s consensus price target is $23.89 and its 52-week trading range is $8.60 to $31.21. If the consensus target is right, this implies upside of more than 65% in the next year. VIVUS shares had come way down, but more positive obesity sales data have added some support in the stock in December. The stock is also off to a good start in 2013 as well. VIVUS was identified as one of the obesity winners in our own internal outlook piece in December. This biotech has been public since before 1995, and its shares have enjoyed ups and downs the whole ride. In fact, its highs were back in the 1990s rather than of late. The consensus is still for a loss of $0.85 per share and only $138.4 million in revenue in 2013, but the obvious hope is that Qnexa has the potential to be a blockbuster drug.
Jon C. Ogg
