BofA Revives Myokardia With New Buy Rating

Myokardia Inc MYOK stock is up 290 percent year-over-year, but upcoming stimulants could drive additional outperformance, according to Bank of America Merrill Lynch. 

The Analyst

BofA's Tazeen Ahmad initiated coverage of Myokardia with a Buy rating and $71 price target.

The Thesis

The biotech’s candidates focus on two common cardiovascular diseases with no U.S.-approved therapies.

“We view MYOK’s focus in areas of undermet need which have relatively large addressable populations as providing meaningful upside leverage,” Ahmad said in a Tuesday note. (See the analyst's track record here.) 

Mavacamten demonstrated favorable tolerability and efficacy in a Phase 2 study in obstructive hypertrophic cardiomyopathy. A pivotal Phase 3 trial will begin this year and, by Ahmad's assessment, “should further validate MYOK’s platform.”

Sanofi SA (ADR) SNY’s recent investment in Mavacamtem is a positive indicator for the drug’s prospects, the analyst said.

At the same time, the data is seen to derisk a parallel study in non-obstructive hypertrophic cardiomyopathy, which is expected to yield Phase 2 results in the second half of 2019.

“We believe both conditions could be underdiagnosed and note multiple opportunities for upside,” Ahmad said. 

The firm’s MYK-491 is seen to represent a more urgent need for a potentially broader population.

Considering Myokardia’s pipeline, BofA anticipates $200-million capital raises in 2019 and 2020 as the programs expand and forecast peak mavacamten sales of $1.5 billion.

Price Action

At the time of publication, Myokardia shares were trading up 2.74 percent at $54.35.

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