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Pharmacyclics (PCYC)

Today’s 2014 Top Picks update is a biotech whose earnings estimates are trending up. This contributor has also increased his price target for the shares.

Pharmacyclics (PCYC)
from The Medical Technology Stock Letter

In January, Pharmacyclics (PCYC) released highly positive data from the RESONATE trial, the first Phase III study of Imbruvica in...

Today’s 2014 Top Picks update is a biotech whose earnings estimates are trending up. This contributor has also increased his price target for the shares.

Pharmacyclics (PCYC)

from The Medical Technology Stock Letter

In January, Pharmacyclics (PCYC) released highly positive data from the RESONATE trial, the first Phase III study of Imbruvica in patients with refractory/relapsed CLL. Shortly thereafter the FDA granted accelerated approval for R/R CLL.

Despite a sharp run-up in the share price after these two catalysts (~50%), the stock has been under pressure after a low-balled 2014 initial guidance by management in April and competitive concerns by some. Prescription data for Imbruvica—after the RESONATE presentation at ASCO and the data publication in The New England Journal of Medicine point to a stronger-than-expected Imbruvica launch.

Wall Street forecasts continue to rise above the conservative guidance and, in our view, Imbruvica is on its way to becoming one of the best-selling drugs ever. EU approvals, driven by partner JNJ, are due in H2:14 and further data suggests various positive combinations with Imbruvica in many other B cell cancers (e.g., DLBCL, multiple myloma, etc.).

Competition, we believe, is way less threatening despite some bearish positions. Last but not least, PCYC’s program for autoimmune disease—with an “ibrutinib-like” lead compound for rheumatoid arthritis and related autoimmune conditions—is well underway, with initial clinical trial disclosure over the next 6-12 months and a patent expiration of 2035. Since the beginning of the year, we raised our BUY LIMIT to 160 and TARGET PRICE of PCYC to 200.

John McCamant, The Medical Technology Stock Letter, www.bioinvest.com, July 14, 2014