Companies in the pharmaceutical industry generally are involved in the lengthy process of getting their drug candidates to market through clinical trials. There can be a fair amount of risk or massive risk involved, as many emerging biotech companies have their entire future based on one drug candidate. On the other hand, if a drug is approved or passes a clinical trial, then there can be incredible upside, depending on a few factors. The reality is that U.S. Food and Drug Administration (FDA) rulings can make or break some companies — with the future in question or with double-digit or even triple-digit gains.
24/7 Wall St. has collected eight key FDA decisions coming up in 2016 or 2017. We have added some color, along with the trading range and price target. Note that, due to many outside and internal factors, there are no assurances that the dates will not change (as Puma just witnessed).
As a side note about the Prescription Drug User Fee Act (PDUFA): a Priority Review designation is granted to medicines that the FDA determines have the potential to provide significant improvements in the treatment, prevention or diagnosis of a disease.
By the end of 2016, Vertex Pharmaceuticals Inc. (NASDAQ: VRTX) is expected to report its Phase 3 interim analysis of VX-661 for the treatment of cystic fibrosis (CF). However, the company currently has a broad Phase 3 program, meaning multiple late-stage trials for different groups of patients with CF who have at least one copy of the F508del mutation.
Two of these studies in people with gating or residual function mutations are expected to complete their enrollment by the end of 2016, and data from these studies are expected in the first half of 2017. Earlier this year Jefferies and Credit Suisse, among other analysts, issued positive calls on this company, each calling for an impressive upside of close to doubling.
Shares of Vertex closed most recently at $78.70, with a consensus analyst price target of $130.57 and a 52-week trading range of $75.90 to $143.45. Consensus estimates predict that the company will have over $2 billion in revenues for the 2016 full year.
Recruitment was completed in January for two Incyte Corp. (NASDAQ: INCY) Phase 2 trials of ruxolitinib in the treatment of colorectal and breast cancer. The overall survival data from both studies is expected by the end of 2016. This data will make or break these mid-stage trials. Considering the broad application to both breast cancer and colorectal cancer, and potentially more cancers in future indications, a successful trial could prove to be electric for this stock. Credit Suisse weighed in on Incyte, seeing some solid upside with a $110 price target, with emphasis on the pipeline.
Incyte shares closed most recently at $68.45. The consensus price target is $91.29, and the 52-week range is $55.00 to $133.62. Consensus estimates call for about $1 billion in revenues for the 2016 full year.