In a report published Wednesday, BMO Capital Markets analyst Jim Birchenough downgraded the rating on Tesaro TSRO from Outperform to Market Perform, but reiterated the $36.00 price target.
In the report, BMO Capital Markets noted, “We are lowering our rating on TSRO to Market Perform from Outperform but maintaining our $36 price target. With positive rolapitant data reflected in current valuation we see limited upside potential in the near term on confirmation of phase 2 results and greater downside risk in the event of trial disappointment or on results that don't match those of netupitant. While we are encouraged by progress with niraparib, expert feedback suggests that the PARP inhibitor field is getting crowded and there is no clear differentiation between niraparib, olaparib, rucaparib, and BM-673, although olaparib has most robust data and a head-start in Europe, while niraparib has a six-month lead in the US. With peak sales estimates of $336 mn for rolapitant and $834 mn for niraparib reflected in our current valuation it is difficult to envision a basis for upward revision over the next 12 months, notwithstanding strong execution, and would look for a better entry point ahead of CINV data.”
Tesaro closed on Tuesday at $35.99.
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