Maxim Group initiated coverage of Agile Therapeutics (NASDAQ:AGRX) with a “buy” rating and $3 price target. The stock closed at 81 cents on Nov. 28.
Agile’s Twirla is a combined hormone contraceptive (CHC) transdermal patch, which is approaching an NDA resubmission after two earlier complete response letters (CRLs). “The valuation is attractive and we like the risk/reward,” writes analyst Caroline Palomeque.
Ms. Palomeque said the issues in the latest CRL were related to adhesion wear, not efficacy or safety. She expects the NDA to be resubmitted in the first quarter of 2019, with potential approval in the second half of 2019.
According to Ms. Palomeque, the CHC market generates about $4-billion in revenue and there is only one patch on the market now: Mylan’s Xulane.
“Twirla offers a low-dose, safer estradiol, potentially with no black box warning. As such, Twirla may be an ideal option for women who do not want a daily oral contraceptive, or who do not want a long-acting but invasive method, such as an IUD or an implant,” she said.
“Based on our understanding of the CRLs and the steps management has taken to resolve them, we believe the probability of success favors Agile and would-be buyers of the stock ahead of the NDA resubmission,” she added.
