HCW starts BioPharmX at buy

H.C. Wainwright has initiated coverage of BioPharmX (NYSE MKT:BPMX) with a “buy” rating and $3 price target. The stock closed at 99 cents on Wednesday.

BioPharmX’s lead product is Violet for the treatment of fibrocystic breast condition (FBC). It was launched in early 2015 and is currently sold over-the-counter in over 7,500 pharmacies in the U.S.

The company also has two prescription products: BPX-01 for the treatment of acne and BPX-03 for the treatment of severe FBC, in mid-stage clinical development.

“We expect BioPharmX to experience significant growth in the mid-term with a five-year revenue CAGR of 135% between fiscal 2017 and fiscal 2022,” writes analyst Swayampakula Ramakanth.

An estimated 50% of U.S. women are believed to suffer from FBC and the associated menstrual breast pain, yet current treatments are either ineffective or, in the case of hormonal therapy, has significant adverse effects.

Violet, on the other hand, is a daily molecular iodine supplement with very few side effects. In previously completed clinical studies, up to 70% of women who received molecular iodine supplement reported freedom from pain and breast lumps after six months.

“We believe that the U.S. market for FBC treatments could reach $400-million per year, and currently we expect sales of Violet to grow from $863,000 in fiscal 2017 to $16.4-million in 2025,” Mr. Ramakanth said.

BPX-03, a prescription molecular iodine product designed to treat severe FBC, has successfully completed a placebo-controlled Phase 2 study and is expected to enter a pivotal Phase 3 study in 2017. “If successfully developed, we believe BPX-03 could be launched in fiscal 2020 and achieve risk-adjusted revenues of $20.7-million by 2025,” he added.