Analysts Chase Tesaro Targets and Ratings Higher

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Another day, another big mover for emerging pharma. Tesaro Inc. (NASDAQ: TSRO) shares have risen more than 20% after the New England Journal of Medicine showed this weekend that Tesaro’s drug called niraparib was working better to stop ovarian cancer growth in more patients than originally thought.

Investors need to understand that Tesaro’s top-line data that were released in June showed that the outcome Phase 3 trial with more than 500 patients created a doubling in the stock at the time. Shares went from under $40 to over $80 at that time, and those shares were at $99.26 at the end of last week, and with a market value of $5 billion before this last news.

Several analysts have keyed in with higher price targets on top of their ratings.

 

Wedbush Securities has a Buy rating and raised its price target to $139 from $107. The firm’s synopsis said:

We see the clinical benefit of niraparib in HRD-negative patients as likely leading to approval in the entire platinum-sensitive ovarian market. Furthermore, we see the lack of requirement for a companion diagnostic for niraparib in these patients as a potential advantage over competing PARP inhibitors.

Tesaro was raised to Buy from Neutral with a $123 price target at Merrill Lynch. That report’s synopsis said that the overhang has been removed after full NOVA trial data was presented at the European Society for Medical Oncology meeting. The firm now sees a clear path to approval and favorable label for niraparib commercial success.

In addition:

  • Credit Suisse has an Outperform rating and raised its target to $122 from $90.
  • FBR Capital Markets reiterated its Outperform rating and raised its target to $115 from $102.
  • Leerink Partners has an Outperform rating and raised its target price to $115 from $108.
  • RBC Capital Markets reiterated its Outperform rating and raised its target from $122 to $128.
  • Raymond James has a Strong Buy rating and raised its price target to $120 from $105.
  • Robert W. Baird has an Outperform rating and raised the target price to $120 from $105.

Tesaro shares were last seen trading up more than 22% at $121.67, and the new 52-week high is $122.36. Its 52-week low is $29.51.

One thing investors should keep in mind here is that Tesaro’s market capitalization rate is now $6.2 billion. The revenue was just $36.56 million in the quarter ending in June. Revenue is projected to be as follows, according to Thomson Reuters:

  • $49.4 million for 2016
  • $145 million for 2017
  • $385.5 million for 2018
  • $768 million for 2019