HCW ups Sesen Bio to buy; PT to $3

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H.C. Wainwright upgraded Sesen Bio (NASDAQ:SESN) to “buy” from “neutral” and raised its price target to $3 from $1 after the company had a successful Type B pre-biologics license application (BLA) meeting with FDA for its lead product, Vicinium, for the treatment of patients with Bacillus Calmette-Guérin (BCG) unresponsive, non-muscle invasive bladder cancer (NMIBC).

Shares of Sesen closed at $1.90 on June 10.

Analyst Swayampakula Ramakanth writes that the agreement facilitates an accelerated approval pathway for Vicinium and Sesen is on-track to initiate a rolling BLA submission in the fourth quarter of 2019.

“Following the green light from the FDA, we believe there is a high likelihood that Vicinium will be approved, and we now project a 90% probability of U.S. approval, up from 60% previously,” he added.

But commercial potential is the big question, Mr. Ramakanth said. “While we believe that Vicinium is likely to be approved and expect the approval to be a major catalyst for the stock, we note that the drug’s commercial potential remains uncertain.”

While pointing out that there is a good opportunity for a new therapy to capture a significant portion of the NMIBC market, Mr. Ramakanth said results from the Phase 3 VISTA study of Vicinium were mostly comparable to Endo Pharmaceuticals’ Valstar, an “approved therapy that has not been well-received by physicians.”

Stephen Kilmer