BMO Kicks Off Coverage of 4 Biotech Players

Researchers at BMO Financial Group have initiated coverage of four companies in the biotech space, with one gaining an “outperform” rating.

In an email to clients sent on Tuesday (January 28), the bank confirmed that its research analyst George Farmer will now cover BioMarin Pharmaceutical (NASDAQ:BMRN), Blueprint Medicines (NASDAQ:BPMC), Mirati Therapeutics (NASDAQ:MRTX) and Seattle Genetics (NASDAQ:SGEN).

Each of these companies, except for Seattle Genetics, has received a standard “market perform” rating. Seattle Genetics obtained an “outperform” rating with a price target of US$139.

Farmer praised the outlook for the Washington State-based biotech researcher thanks in part to the potential attached to sales from assets like Padcev, its promising treatment for urothelial cancer, alongside tucatinib, a treatment for HER2+ metastatic breast cancer that is still in the pipeline.

“Although initial approvals are/will be limited to end-stage disease, we expect expanded application in earlier lines of therapies based on product profiles,” the researcher indicated.

In December, Seattle Genetics confirmed it had finalized its new drug application for tucatinib with the US Food and Drug Administration (FDA). According to the company, the FDA previously granted the drug a breakthrough therapy designation.

During Tuesday’s trading session, Seattle Genetics saw a minor share price improvement. The firm opened in New York at a price of US$11.71.

In his initial comments on Mirati Therapeutics, Farmer said the company currently offers investors a proper “risk/reward potential,” particularly in terms of its oncology drug pipeline.

The oncology sector has piqued experts’ interest as a potentially leading market in 2020 for both the biotech and the pharma industries.

Farmer told investors to monitor the clinical trial attached to MRTX849, an oral molecule developed to prevent KRAS mutation. In an explainer on the rare genetic mutation, the Genetics Home Reference states, “The KRAS gene belongs to a class of genes known as oncogenes. When mutated, oncogenes have the potential to cause normal cells to become cancerous.”

Mirati Therapeutics is investigating the use of its treatment to prevent KRAS G12C mutations, which can be present in 14 percent of lung adenocarcinoma patients and 4 percent of colorectal cancer patients.

In October, the San Diego, California-based oncology firm announced it had obtained the first results from its ongoing Phase 1/2 trial of MRTX849. These early results showed a promising use in KRAS therapy, according to President and CEO Dr. Charles M. Baum.

Similar to Seattle Genetics, Mirati Therapeutics saw a small increase in its trading value in New York during Tuesday’s trading session. As of 1:48 p.m. EST that day, shares of the company were at US$90.73.

Farmer was less enthusiastic about the long-term outlook for BioMarin and Blueprint Medicines, assigning the companies with price targets of US$94 and US$74, respectively.

He did, however, highlight the potential for products from both companies, notably the avapritinib and pralsetinib assets with Blueprint Medicines and the products Valrox and vosoritide with BioMarin.

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Securities Disclosure: I, Bryan Mc Govern, hold no direct investment interest in any company mentioned in this article.