Here's What Makes La Jolla Pharma A 2017 Top Pick At Chardan

Chardan Capital names La Jolla Pharmaceutical Company LJPC as its Top Pick for 2017,saying the company has shown one of the more compelling and convincing rare disease strategies in biotech.

“By focusing on naturally-occurring peptides with well-established biological functions, LJPC has twice (with LJPC-501 and LJPC-401) been able to achieve regulatory support to move pipeline products into pivotal trials in relatively short amounts of time,” analyst Gbola Amusa wrote in a note.

California-based La Jolla is set to announce the pivotal late-stage data of LJPC-501 for catecholamine-resistant hypotension (CRH) in the first quarter.

Buy Rating, Justification

Amusa affirmed his Buy rating on the stock, as it is optimistic that LJPC-501 will deliver positive results in the study after its prior positive published phase I/II pilot result. Amusa models 2025 sales of about $1.06 billion from the drug.

“Though we understand p<0.05 is needed for a technical success, we would take p<0.01 as a robust outcome that would facilitate more positive scenarios for market uptake,” Amusa noted.

The analyst also pointed out that other pipeline drug LJPC-401 had encouraging phase I data in September 2016, with a pivotal study expected to start in mid-2017. Amusa forecast $323 million in global sales from the drug in 2025.

“We note the potential for LJPC-401 use in hereditary hemochromatosis (HH) and in hemolytic anemias (thalassemias, sickle cell disease) but for now model use only in HH,” Amusa highlighted.

Amusa has a price target of $75 on La Jolla shares, which, at time of writing had fallen 2.95 percent to $19.11. The $75 target implies potential upside of 281 percent over January 23 close of $19.69.