Post by tomsylver on Jun 29, 2017 20:06:01 GMT
Portola Stock Expected To Retain Momentum With BevyxXa Commercial Launch
Jun. 29, 2017 3:31 AM ET|12 comments| About: Portola Pharmaceuticals (PTLA), Includes: SNY
Emerging Equities
Special situations, long/short equity
(486 followers)
Summary
Portola Pharmaceuticals received FDA approval for BevyxXa, a treatment for deep vein thrombosis.
The drug is designed for use in hospital and home settings, unlike competitors which may only be used in hospitals.
The company is also expected to receive the FDA decision for AndexXa in January next year.
Portola Pharmaceuticals (NASDAQ:PTLA) is preparing for the commercial launch of its newly approved drug, BevyxXa (betrixaban). This medicine is designed for patients suffering from venous thromboembolism. The drug is expected to have wider market than its closest competition, as it can be used be in both hospital and home settings, whereas the current treatments are only suitable for hospital administration. Another catalyst for the company stock will be in January next year as the FDA delivers its verdict for AndexXa.
The company recently received FDA approval for betrixaban to prevent venous thromboembolism (VTE) in adult patients hospitalized for acute medical illness. The news propelled the stock to a new 52-week high, making it the right time to assess the impact of this new revenue stream on the company's bottom line and its stock price. Betrixaban is the first commercial medicine for Portola, implying that it is now going to have a steady revenue stream instead of only relying upon collaboration revenues and funding. The company is going to bet on the fact that betrixaban, or BevyxXa as it is branded by Portola, is the first oral treatment for deep vein thrombosis and pulmonary embolisms. Another major point in the company's favor is that the drug is designed to offer extended duration treatment, which translates into more convenient and infrequent dosage, again giving it an edge over current treatments. These characteristics are expected to let Portola carve a niche for itself in the broader market.
According to the company's own estimates, there are roughly 200,000 Americans diagnosed with deep vein thrombosis every year. Nearly 40,000 of them die due to complications related to pulmonary embolism, which generally involves a blood clot reaching the lungs and blocking blood flow. BevyxXa is designed to help stop the occurrence of such incidents by thinning the blood and avoiding clots. The current treatment for the condition includes Sanofi's (NYSE:SNY) Lovenox. However, the main issue with Lovenox is its short-term effect and other side effects. BevyxXa, on the other hand, is able to provide longer-lasting results. Another point is that Lovenox may only be used in hospital settings, whereas BevyxXa may be used at home as well as in hospital settings, thus effectively widening the market for the new drug by a large margin. Portola has also said that a large portion of DVT events occur at home. While BevyxXa may receive competition from Lovenox and heparin in hospital settings, the competition is almost negligible in home settings, thus boosting the scope for the drug.
Market experts are expecting BevyxXa to generate close to $1 billion in annual revenue in about a five-year time frame. The company is aiming to hit the market later this year, possibly by August. However, the launch may be slightly delayed, as it needs to set up production facilities as well as marketing and distribution networks. It is reasonable to expect that Portola will be up and running with its new drug by the end of this year. This event will be a major catalyst for PTLA stock, which has already grown over 150 percent this year so far. Once the euphoria surrounding the latest FDA approval dies down, the stock is expected to show some pullback, providing an ideal opportunity for initiating a position. However, such a pullback should not be taken as the end of the stock's momentum, which is expected to gear for another climb following the upcoming catalyst of the market launch of BevyxXa later in 2017.
Helping the momentum of the stock is another catalyst which has been overshadowed by BevyxXa. The company is awaiting another FDA approval for its AndexXa drug as well. This drug also has the potential to become a blockbuster, as it will be the first FDA-approved reversal agent of factor Xa anticoagulants that sometimes lead to a major bleeding event in patients. AndexXa has received major support from various pharma giants for its development and has shown encouraging results. The FDA decision for it is likely to be out in January next year.
For a company with such strong potential, Portola has a surprisingly low risk profile. The major risk for current investors is likely to arise from the recent run-up in the stock's market price. So, it is more prudent to go for staggered investment, using every dip to build up the position. Another minor nagging point is the delay in filing the application for AndexXa. The company recently pushed the timeline from the second quarter of the year to July 2017. However, the issue is not likely to have much negative impact on Portola, making the stock a good candidate for medium-to-long term investment.
Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
Jun. 29, 2017 3:31 AM ET|12 comments| About: Portola Pharmaceuticals (PTLA), Includes: SNY
Emerging Equities
Special situations, long/short equity
(486 followers)
Summary
Portola Pharmaceuticals received FDA approval for BevyxXa, a treatment for deep vein thrombosis.
The drug is designed for use in hospital and home settings, unlike competitors which may only be used in hospitals.
The company is also expected to receive the FDA decision for AndexXa in January next year.
Portola Pharmaceuticals (NASDAQ:PTLA) is preparing for the commercial launch of its newly approved drug, BevyxXa (betrixaban). This medicine is designed for patients suffering from venous thromboembolism. The drug is expected to have wider market than its closest competition, as it can be used be in both hospital and home settings, whereas the current treatments are only suitable for hospital administration. Another catalyst for the company stock will be in January next year as the FDA delivers its verdict for AndexXa.
The company recently received FDA approval for betrixaban to prevent venous thromboembolism (VTE) in adult patients hospitalized for acute medical illness. The news propelled the stock to a new 52-week high, making it the right time to assess the impact of this new revenue stream on the company's bottom line and its stock price. Betrixaban is the first commercial medicine for Portola, implying that it is now going to have a steady revenue stream instead of only relying upon collaboration revenues and funding. The company is going to bet on the fact that betrixaban, or BevyxXa as it is branded by Portola, is the first oral treatment for deep vein thrombosis and pulmonary embolisms. Another major point in the company's favor is that the drug is designed to offer extended duration treatment, which translates into more convenient and infrequent dosage, again giving it an edge over current treatments. These characteristics are expected to let Portola carve a niche for itself in the broader market.
According to the company's own estimates, there are roughly 200,000 Americans diagnosed with deep vein thrombosis every year. Nearly 40,000 of them die due to complications related to pulmonary embolism, which generally involves a blood clot reaching the lungs and blocking blood flow. BevyxXa is designed to help stop the occurrence of such incidents by thinning the blood and avoiding clots. The current treatment for the condition includes Sanofi's (NYSE:SNY) Lovenox. However, the main issue with Lovenox is its short-term effect and other side effects. BevyxXa, on the other hand, is able to provide longer-lasting results. Another point is that Lovenox may only be used in hospital settings, whereas BevyxXa may be used at home as well as in hospital settings, thus effectively widening the market for the new drug by a large margin. Portola has also said that a large portion of DVT events occur at home. While BevyxXa may receive competition from Lovenox and heparin in hospital settings, the competition is almost negligible in home settings, thus boosting the scope for the drug.
Market experts are expecting BevyxXa to generate close to $1 billion in annual revenue in about a five-year time frame. The company is aiming to hit the market later this year, possibly by August. However, the launch may be slightly delayed, as it needs to set up production facilities as well as marketing and distribution networks. It is reasonable to expect that Portola will be up and running with its new drug by the end of this year. This event will be a major catalyst for PTLA stock, which has already grown over 150 percent this year so far. Once the euphoria surrounding the latest FDA approval dies down, the stock is expected to show some pullback, providing an ideal opportunity for initiating a position. However, such a pullback should not be taken as the end of the stock's momentum, which is expected to gear for another climb following the upcoming catalyst of the market launch of BevyxXa later in 2017.
Helping the momentum of the stock is another catalyst which has been overshadowed by BevyxXa. The company is awaiting another FDA approval for its AndexXa drug as well. This drug also has the potential to become a blockbuster, as it will be the first FDA-approved reversal agent of factor Xa anticoagulants that sometimes lead to a major bleeding event in patients. AndexXa has received major support from various pharma giants for its development and has shown encouraging results. The FDA decision for it is likely to be out in January next year.
For a company with such strong potential, Portola has a surprisingly low risk profile. The major risk for current investors is likely to arise from the recent run-up in the stock's market price. So, it is more prudent to go for staggered investment, using every dip to build up the position. Another minor nagging point is the delay in filing the application for AndexXa. The company recently pushed the timeline from the second quarter of the year to July 2017. However, the issue is not likely to have much negative impact on Portola, making the stock a good candidate for medium-to-long term investment.
Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
