SVB Leerink raised its price target for AMAG Pharmaceuticals (NASDAQ:AMAG) to $14 from $9 ahead of an FDA advisory committee meeting on Oct. 29. The stock closed at $11.50 on Oct. 4.
“Based on our MEDACorp survey of 50 OB-GYNs, we believe the FDA AdCom on Oct. 29 is likely to recommend retaining Makena on the market despite negative results from the PROLONG confirmatory study,” writes analyst Ami Fadia. Makena is indicated to reduce the risk of preterm birth.
Ms. Fadia also lowered the probability of removing Makena from the market to 20% from 50%, which raised her price target to reflect “our increased confidence heading into the AdCom.”
Among other thinks, the survey found that only 6% of those surveyed believe a lack of Makena efficacy was the most likely reason behind the PROLONG trial failure;92% of those surveyed would vote to keep Makena on the market; and even in light of the PROLONG results, should Makena stay on the market, 86% of physicians anticipated no change to their current Makena prescribing habits, Ms. Fadia said.
“While there remain uncertainties around longer-term growth, at current levels, we believe the risk/reward ahead of the AdCom is skewed to the upside,” she added.
