On Tuesday, Ascendis Pharma (NASDAQ:ASND) received an upgraded stock rating from TD Cowen, shifting from Hold to Buy, accompanied by an increase in the price target to $175 from $156. The revised outlook is anchored on optimistic expectations for the upcoming launch of the company's drug candidate.
TD Cowen's positive sentiment stems from the anticipation of approval by the August 14th PDUFA date for Ascendis Pharma's drug, with expectations of a clean label without the need for a black box warning or Risk Evaluation and Mitigation Strategies (REMS). Furthermore, the analyst projects a higher pricing point of $200,000 per year, which factors in a premium over Natpara, a comparable drug available in the European Union.
Key opinion leader (KOL) checks indicate that between 30% and 60% of patients could be suitable candidates for the treatment. Based on these insights, TD Cowen has raised its peak sales estimates for the drug to €1.4 billion.
The analyst's statement highlighted the factors influencing the upgrade: "Our more positive sentiment on the PTH launch is driven by our expectations for approval by August 14th PDUFA with clean label and higher price, which is based on Yorvipath's premium to Natpara in the EU." The firm also noted the potential patient population, with a significant percentage likely to benefit from the therapy, as a reason for the increased sales forecast and the subsequent stock upgrade.
Ascendis Pharma's stock adjustment reflects the firm's confidence in the drug's market potential and its ability to achieve significant commercial success upon approval. The increased price target of $175 represents a notable $19 rise from the previous target.
In other recent news, Ascendis Pharma has reported promising outcomes from its ongoing Phase 1/2 IL-Believe Trial, evaluating TransCon IL-2 β/γ therapy for patients with melanoma. The company has also received a new coverage initiation from Stifel, starting with a Buy rating and a price target set at $200. Furthermore, Morgan Stanley (NYSE:MS) adjusted its price target on shares of Ascendis Pharma, increasing it to $140 from the previous $116.
The U.S. Food and Drug Administration (FDA) extended the review period for Ascendis Pharma's New Drug Application (NDA) for TransCon PTH. The Prescription Drug User Fee Act (PDUFA) goal date is now set for August 14, 2024. Ascendis Pharma's management remains optimistic about the possibility of launching TransCon PTH in the third quarter of 2024.
Ascendis Pharma announced significant findings from a two-year post-hoc analysis of its Phase 3 PaTHway Trial, highlighting sustained improvements in kidney function in adults with chronic hypoparathyroidism treated with TransCon PTH. These findings suggest that TransCon PTH could offer a significant therapeutic benefit for patients with chronic hypoparathyroidism, potentially improving long-term kidney health.
InvestingPro Insights
In light of the upgraded stock rating for Ascendis Pharma, real-time data from InvestingPro provides additional context for investors. The company's market capitalization stands at $7.42 billion, indicating significant size and potential influence within the pharmaceutical industry. Despite a lack of profitability in the last twelve months, with an adjusted P/E ratio of -13.78, Ascendis Pharma has experienced substantial revenue growth of 322.18% over the same period. This growth is a testament to the company's expanding operations and may align with TD Cowen's optimistic outlook on the drug candidate's potential.
InvestingPro Tips highlight that while two analysts have revised their earnings upwards for the upcoming period, suggesting positive sentiment, the company's short-term obligations currently exceed its liquid assets, which could present financial challenges. Additionally, analysts do not anticipate Ascendis Pharma to be profitable this year, which is consistent with the company's negative P/E ratio. Nonetheless, with a high return over the last decade, investors may still find the company's long-term prospects appealing.
For those looking to dive deeper into Ascendis Pharma's financial metrics and analyst forecasts, InvestingPro offers additional tips and insights. Use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription, and discover the full scope of analysis available for informed investment decisions. With six more InvestingPro Tips available, investors can gain a comprehensive understanding of Ascendis Pharma's financial health and market positioning.
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