ViroPharma (NASDAQ: VPHM) is higher Wednesday following positive Germany-initial reimbursement on Plenadren.
"We believe Plenadren, a new formulation of hydrocortisol for adrenal insufficiency, will achieve $248M in EU sales by 2019 With minimal SGA associated with the product we see Plenadren contributing significantly to EPS," analysts at Deutsche Bank said.
While new rules in orphan drug reimbursement approval requires new drugs go through the IQWIG, the analyst said Plenadren is exempt by the BDA because: (1) it has the same active ingredient as hydrocortisol, (2) same ATC, and (3) has same method of action as hydrocortisol.
Plenadren is outside of a reference group, the firm also notes, which is the most positive scenario for Plenadren pricing.
The firm believes the Street is "underestimating" the earnings leverage with Plenadren and the market opportunity. They are modelling EPS of $2.84 by 2015, which is up from $0.62 in 2013E.
The reiterated their Buy rating and price target of $42.00.