HCW starts Agile Therapeutics at buy

H.C. Wainwright launched coverage of Agile Therapeutics (NASDAQ:AGRX) with a “buy” rating and $10 price target, saying the company is significantly undervalued assuming its Twirla combination hormonal contraceptive (CHC) patch can get FDA approval. The stock closed at $4.93 on July 19.

Analyst Corey Davis writes that Twirla, a weekly low-dose estradiol/levonorgestrel patch, has had a bumpy development pathway.

“Despite controversial new efficacy data, we believe Twirla is approvable, and we will know more shortly since the NDA was resubmitted end-June and should be accepted by end-July, then have a six-month PDUFA date by end-2017,” he said.

Twirla would be the only low-dose CHC patch on the market, and “we project peak sales of $430-million, even assuming lower market share and price than the company's own forecasts,” he added. 

Mr. Davis said he believes investors' data skepticism and a financing overhang have contributed to Agile trading at a multiple of EV-to-estimated peak sales of about 0.22 times. 

In addition, he said the stock currently reflects a 25% probability of approval, while his $10 target reflects 65%-odds of approval.