Dipexium Pharmaceuticals (NASDAQ:DPRX) and Tandem Diabetes (NASDAQ:TNDM) have made Feltl & Co.’s Best Ideas list for the second half this year.
Analyst Ben Haynor writes that top-line data for Dipexium’s two Phase 3 studies should be released in the next six-to-10 weeks, “which we believe will be positive,” based on trials conducted by Magainin Pharmaceuticals in the late 1990s and the design of Dipexium’s studies, which compare Locilex versus placebo cream.
Locilex is a topical antibiotic for use in mild diabetic foot infections (DFI). Currently, there are no pharmaceuticals approved for a mild DFI indication, despite over a half million cases occurring in the U.S. annually.
Dipexium’s Phase 3 trial design has been deemed acceptable to European regulators without requiring European trials, which expands the potential U.S. market by some 50%-plus. “When we factor in the potential EU revenue, our worldwide peak sales estimate increases to about $450-million in both 2022 and 2023,” Mr. Haynor added.
He rates shares of Dipexium a “strong buy” with a $32.50 price target. The stock was quoted at $9.83 at mid-day today.
Mr. Haynor said Tandem Diabetes shares have recently been punished due to decision by UnitedHealthcare (UNH) to designate Medtronic as the preferred, in-network provider of insulin pumps, effective July 1.
“We would note 7.5% to 8.0% of the pumps Tandem shipped in 2015 were to UNH plan members affected by the decision, but we think it more important the company did not alter its 2016 guidance,” he noted.
“We think this signals the company is comfortable in other aspects of its business and believes any UNH impact will be offset by stronger performance elsewhere.”
Mr. Haynor rates the stock a “strong buy” with a price target of $14.75. Tandem shares were quoted at $7.51 at mid-day today.
