WB ups ARIAD price target to $12

William Blair has raised it price target for ARIAD Pharmaceuticals (NASDAQ:ARIA) to $12 from $10 after an analyst day on Friday where the company discussed the outcome of its strategic review. The stock was quoted at $7.59 on Monday afternoon.

The strategic review included ARIAD’s commitment to financial discipline and its refined focus on rare cancers with precision medicines in Iclusig, brigatinib, and AP32788, as well as discovery work on a suite of oral agents in immuno-oncology.

“We believe such strategic actions will put ARIAD on a clear path to profitability in 2019,” writes analyst Katherine Xu.

Ms. Xu said her new price target reflects increasing penetration rates of Iclusig and brigatinib in their respective lines of therapy. Both Iclusig and brigatinib have best-in-class potency and resistance profile.

“We believe that with dose reductions, Iclusig will prove to have a manageable side-effect profile and be the preferred agent in the second-line setting, if patients do not achieve an optimal response to frontline therapy in chronic myelogenous leukemia,” she added.

In addition, she believes that brigatinib’s profile will help overcome its late-mover disadvantage as the third second-generation therapy for ALK+ NSCLC and achieve a respectable market share.