RBC focused on 12 specific stocks with data expected in 2016. We screened those stocks for the companies with Phase 3 data that seem to be the farthest along and offer the best chance for approval. The stocks also have to be rated Outperform at RBC. It should be noted that buying and trading these stocks is only suitable for very aggressive accounts.
Aerie Pharmaceuticals
This company has Phase 3 data coming that the RBC team feels has a very good chance of working. Aerie Pharmaceuticals Inc. (NASDAQ: AERI) is a clinical-stage pharmaceutical company focused on the discovery, development and commercialization of first-in-class therapies for the treatment of patients with glaucoma and other diseases of the eye.
Aerie recently reported the successful results of its second Phase 3 registration trial in the United States, named Rocket 2, wherein the primary efficacy endpoint was to demonstrate non-inferiority of IOP lowering for Rhopressa compared to timolol. Rocket 3, a 12-month safety-only study, is currently in progress, as is a fourth Phase 3 trial for Rhopressa, named Rocket 4. Aerie expects to file a new drug application for Rhopressa with the FDA in the third quarter of 2016.
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Rhopressa is being developed as a once-daily dosed glaucoma therapy. This more convenient dosing regimen is expected to result in higher patient compliance, which may lead to improved outcomes. With 31 million prescriptions being written for glaucoma, this could be a huge winner. The analysts are also bullish on Roclatan which is a fixed-dose combination of Rhopressa and latanprost to increase fluid outflow through uveoscleral pathway, the eye’s secondary drain.
The RBC price target for the stock is $50, and the Thomson/First Call consensus target price is $45.14. Shares closed on Friday at $19.89.
Inter-Cellular Therapies
This company is developing novel drugs for the treatment of neuropsychiatric and neurodegenerative disease and other disorders of the central nervous system (CNS). Inter-Cellular Therapies Inc. (NASDAQ: ITCI) is developing its lead drug candidate, ITI-007, for the treatment of schizophrenia, behavioral disturbances in dementia, bipolar disorder and other neuropsychiatric and neurological disorders.
The company is also utilizing its phosphodiesterase platform and other proprietary chemistry platforms to develop drugs for the treatment of cognitive deficits in schizophrenia and other CNS disorders. In addition, it is developing inhibitors against other targets for CNS indications such as Alzheimer’s disease, Parkinson’s disease and depression, and non-CNS indications such as cardiovascular disease.
The first Phase 3 study for the ITI-007 reinforced efficacy and included an outstanding safety and tolerability profile. The analysts remain bullish on the second Phase 3 data, which are due out in the middle of this year. Competitive on efficacy with Risperdal, the drug is appealing for schizophrenic maintenance, which they see as a $1 billion to $2 billion market. They are even more positive on the use in bipolar and adjunctive depression arena.
RBC has a $95 price objective, and the consensus price target is $77.542. Shares closed most recently at $52.79 apiece.
Medicines Company
This stock has been on a total roller-coaster ride over the past year. Medicines Co.’s (NASDAQ: MDCO) goal is to be a leading provider of solutions in three areas: serious infectious disease care, acute cardiovascular care and surgery and perioperative care. The company is focused on saving lives, alleviating suffering and contributing to the economics of health care by focusing on 3,000 leading acute/intensive care hospitals worldwide.
The stock shot up in the fall when the company announced that an experimental cholesterol drug being co-developed with Alnylam Pharmaceuticals lowered LDL-C, or “bad” cholesterol, levels by around 83% in a small, early stage study. The drug ALN-PCSsc is an injected-RNAi therapy designed to block the expression of the enzyme PCSK9, a protein that plays a critical role in regulating circulating levels of bad cholesterol in the blood.
RBC expects Phase 2 data for MDCO-216 and ALN-PCSsc, and Phase 3 data for Carbavance all this year. The analysts are currently assigning a 60% probability of success to Carbavance, and successful Phase 3 data would take the probability much higher.
The RBC price target is posted at $50, and the consensus target is $46.60. The stock closed Friday at $33.28.
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Again, these stocks are only suitable for very aggressive accounts. However, they are well along in the clinical trials as they are close to presenting Phase 3 results. The stock could move big either way, depending on the outcomes.
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