HCW ups SteadyMed price target to $15

H.C. Wainwright raised its price target for SteadyMed (NASDAQ:STDY) to $15 from $10 after the Patent Trial and Appeal Board ruled in favor of SteadyMed in an inter partes review (IPR) proceeding against United Therapeutics’ 8,497393 patent, finding all 22 claims in the patent unpatentable. The stock closed at $5.80 on March 31.

“Having been close followers of this IPR from the very beginning, this news came as a welcome validation of our long-standing bull thesis on SteadyMed: in our view, United’s key product-by-process treprostinil patent was a weak IP barrier, providing ample opportunity for competitors like SteadyMed to attack and win,” writes analyst Andrew Fein.

He believes that the verdict also highlights an important point for the biotech industry broadly: in a recent string of biotech IPRs, “it is clear that the IPR process is becoming less of a frivolous nuisance and more of a legitimate form of IP challenge with time and cost benefits for a smaller cap biotech company.”

For SteadyMed, Mr. Fein said this IPR win is pivotal as it removes a key layer of legal risk around Trevyent’s path to commercialization.

“With this win in hand, we do not regard the issuance of United’s new treprostinil patents last month (‘066 and ‘901 patents) as categorical hindrance, but rather as relative time delay,” he added.

Given proof-of-concept of the company’s legal freedom to advance, and the NDA submission pending for the second quarter this year, “we are increasing our modeled probability of success for commercial Trevyent from 66% to 80%,” Mr. Fein said.