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Astex Pharmaceuticals, Inc. Message Board

  • maximus06906 maximus06906 Apr 2, 2013 8:38 AM Flag

    Upgrade This Morning

    JMP Securities upgrades to market outperform with a $8 target. Will try and get the report and and get the highlights for the MB.


    Sentiment: Strong Buy

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    • Sorry. I have tried posting a small headline of the research report but Yahoo MB will not let me cut and paste. Will try again later.


      • 1 Reply to maximus06906
      • One more time:
        Initiating coverage on Astex Pharmaceuticals with a Market Outperform rating
        and a twelve-month price target of $8.00 based on a composite valuation by
        NPV sum-of-the-parts, DCF, and comparable company analyses. Astex, formerly
        known as Supergen, has long been known as the company primarily responsible
        for the development of Dacogen (decitabine) - one of two leading hypomethylating
        agents (HMA) for the treatment of MDS. Even with the threat of generic entrants in the
        U.S. beginning in 2Q13, we believe that the ten-year market exclusivity of Dacogen
        in the EU, together with the clinical and commercial potential of its development
        candidates SGI-110 and AT13387, will create appreciable upside to the company’s
        current valuation.
        Market Cap is ~$400MM, tech value ~$260MM, ten-year Dacogen market
        exclusivity in the EU – what are we missing here? Other valuation metrics? How
        does $1.37 cash per diluted share at the end of FY12 sound? In our estimation,
        the 10-year Dacogen (decitabine) royalty revenue is worth $2.00 per share on an
        NPV basis alone. The company’s pipeline boasts assets with best-in-class potential,
        including SGI-110, a next-generation HMA compound with improved pharmacologic
        properties, and AT13387, a non-ansamycin Hsp90 inhibitor that is well-differentiated
        from a development perspective. Moreover, key assets within the company’s partnered
        portfolio are aimed at compelling targets within the oncology space, creating further, riskreduced
        revenue potential for ASTX in the form of royalties and milestone payments.
        SGI-110 provides visibility into an important product life-cycle management
        strategy. In our view, updated data from a Phase I/II trial of SGI-110 in patients with
        heavily pretreated AML and MDS presented at ASH in December were impressive.
        In addition to confirming a PK/PD profile more favorable to free decitabine, objective
        responses and hematologic improvements were observed in both HMA-naïve and
        HMA–pretreated patients, which translates to a significant market opportunity. Results
        from the ongoing Phase II expansion portion are expected in 4Q13 and will inform the
        design of a registration-directed study expected to initiate year-end 2013 or early in
        2014. Albeit higher risk, we also believe the solid tumor development potential with
        SGI-110 warrants added credit, and regard it as adding further upside potential to
        our price target as these programs mature over 2013. Of note, SGI-110 has patent
        protection out to at least 2025.

        Sentiment: Strong Buy

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