On October 11, S&P initiated coverage of ONXX with a buy rating and PT $105.
We project revenues of $331 million in 2012 and $566 million in 2013, with latter period growth driven by the July 2012 FDA approval of Kyprolis for relapsed multiple myeloma. Although it is a more mature product, we think Nexavar, partnered wth Bayer, could see a boost in sales gowth upon a positive phase III outcome in thyroid cancer, for which data is expected in late 2012.We expect earlier Kyprolis use to drive long-term growth.
Our 12-month target price of $105 is based on our net present value of ONXX's currently marketed
drug roster and clinical pipeline. We #$%$ a 16% blended risk discount rate, and estimate peak annual global sales of Kyprolis of more than $2 billion, reflecting our view of favorable label expansion prospects.