Look up in the sky! It’s a bird! It’s a plane! It’s Santa Claus! No. It’s United Therapeutics (UTHR).
Reuters Shares of the United Therapeutics have surged 23% to $107.65, on what’s looking to be a pretty decent day for biotech stocks. The iShares Nasdaq Biotechnology Index ETF (IBB) has gained 0.9% to $225.75, as Gilead Sciences (GILD) has risen 0.7% to $75.16 and Celgene (CELG) has ticked up 0.4% to $168.09.
United Therapeutics has jumped thanks to the FDA’s decision to approve its hypertension drug, Orenitram. And believe me when I say, nobody saw this coming. JPMorgan’s Geoff Meacham and team explain:
United's phase 3 trials for Orenitram were mixed, with two studies (FREEDOM-C and C2) showing no statistically significant benefit in 6MWD, and only a modest benefit in a third study (FREEDOM-M). Further, Orenitram demonstrated no benefit in combination with ERAs or PDE5s in two studies. Based on these mixed results, and the aforementioned CRL, Orenitram's approval is a clear surprise.
Though Orenitram is approved, it is worth noting that monotherapy is recommended. Combination therapy is a widely used strategy in PAH; hence, adoption may be more limited than it might be otherwise. Interestingly, we also note that the label describes Orenitram's efficacy as modest. Rapid titration and dose interruptions according to the label could be problematic.
Still, Meacham upgraded United Therapeutics to Neutral, based on the decision, and raised his price target to $90 from $62.
Shares of United Therapeutics have gained 102% this year, while Gilead Sciences has advanced 105% and Celgene has risen 115%. The iShares Nasdaq Biotechnology Index ETF is up 65% in 2013.
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