Why Wedbush Sees Albireo More Than Doubling

Albireo Pharma, Inc. (NASDAQ: ALBO) recently received some positive news from the U.S. Food and Drug Administration (FDA) and it could have huge implications for the stock. One analyst actually sees the stock more than doubling as a result of this news.

Wedbush has an Outperform rating with a $69 price target, implying an upside of 111% from the most recent closing price.

Albireo’s lead molecule A4250 had previously received orphan drug designation (ODD) in the U.S. and E.U. and granted access to EMA’s PRIority MEdicines (PRIME) program. It was also the recipient of another acknowledgement on June 12 when it was granted rare pediatric disease designation (RPDD) by the FDA for the treatment of progressive familial intrahepatic cholestasis (PFIC).

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Ultimately, these designations confirm the FDA’s recognition that the PFIC community faces a critical need for new treatments and further strengthens Albireo’s A4250 program. Albireo previously announced enrollment of the first patient in the pivotal Phase 3 trial of A4250 for PFIC with topline data release anticipated in late 2019 or early 2020. Albireo ended in the first quarter with cash and cash equivalents totaling approximately $192.9 million, which is anticipated to provide sufficient runway into 2021.

According to Wedbush:

Albireo is eligible to be awarded a priority review voucher (PRV) upon A4250 approval. Since this voucher can be used by the sponsor for any product to shorten the FDA review time for any future NDA/BLA submission from 10 months to 6 months and can be sold to others, a market had developed for them. To our knowledge, the highest price paid for a PRV is $350 million in 2015, when United Therapeutics sold its voucher to AbbVie and the lowest price paid was $67 million by Sanofi and Regeneron in 2014 for a voucher awarded to BioMarin. In the last 12 months, priority review vouchers were sold for between $110 million to $150 million each (Spark Therapeutic sold a PRV to Jazz Pharmaceutical for $110 million in April 2018 and Teva Pharmaceutical bought a PRV from an unnamed third party for $150 million in August 2017).

The firm went on to talk about Albireo’s Phase 2 trial:

We note that just 4 weeks of A4250’s treatment in the Phase 2 trial decreased pruritus in most patients and reduced serum bile acid levels. Based on the positive Phase 2 results and overall favorable tolerability profile of A4250, we expect to see clean safety and potentially increased efficacy through 24 weeks of treatment in the Phase 3 trial. Top-line data from the PEDFIC-1 trial is anticipated in late 2019 or early 2020.

Shares of Albireo were last seen at $32.04, with a consensus analyst price target of $63.50 and a 52-week range of $15.31 to $39.87.

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