Healthcare Business

Is Infinity Fully Valued Now, or Is More Upside Left?

Infinity Pharmaceuticals Inc. (NASDAQ: INFI) has seen its stock rise so much on a pact that you might just think it is a buyout. It turns out that the pact is the real news rather than any merger. Infinity will partner with Abbvie Inc. (NYSE: ABBV) to further develop and commercialize IPI-145, also known as duvelisib. This drug is an oral inhibitor that treats blood cancer by blocking PI3K, a protein that plays a role in tumor growth.

Unfortunately, there is one more thing to consider here: is Infinity now fully valued? 24/7 Wall St. has taken a look at the news and then looked at other metrics. We then looked at what the analyst community thought of it, as well as options trading volume, the stock chart and even the short interest.

What seems odd here is that there seems to be no clear outcome on how this should be valued going forward. That being said, we would strongly encourage any investors or speculators who are interested in learning more about Infinity to consider all of these issues. An image at the end of this report combines the chart and fundamentals.

Abbvie agreed to pay Infinity $275 million up front in cash. Infinity is further eligible to receive up to $530 million for the achievement of development, regulatory and commercial milestones, including up to $405 million for the achievement of milestones through the first commercial sale of the drug.

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Infinity further announced that it would enter into a master clinical supply agreement with Roche. Roche will supply Infinity with Gazyva so that it can evaluate the combination of both Gazyva and duvelisib. Infinity also entered into a material transfer agreement with Roche in which it will allow Roche to use duvelisib in preclinical and translational research to evaluate the combination of duvelisib and Gazyva.

Julian Adams, president of research and development at Infinity said, “Our ability to evaluate duvelisib in combination with Gazyva in multiple clinical studies is part of Infinity’s strategy to combine duvelisib with both current standards of care and novel targeted therapies.”

One thing to consider is that Infinity does have competition that is already on the market. Gilead, Pharmacyclics and Johnson & Johnson are all said to have brought competing drugs to the market.

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