Goldman Sachs Neutral On Alder Biopharma As Launch Of Migraine Treatment Approaches

Before Tuesday, 90 percent of Alder Biopharmaceuticals Inc ALDR analysts were buying the stock. But one analyst has diluted the decisive bullishness with rare ambivalence.

The Rating

Goldman Sachs analyst Dana Flanders initiated coverage on Alder with a Neutral rating and $17 price target.

The Thesis

The rating reflects ambiguity around commercial questions for IV eptinezumab, a calcitonin gene-related peptide monoclonal antibody inhibitor that Flanders said he expects to launch in the second half of 2019. (See the analyst's track record here.)

The analyst considers the significant and underserved migraine market a $5-billion opportunity, but also a highly competitive one. Amgen, Inc. AMGN, Eli Lilly And Co LLY and Teva Pharmaceuticals Industries Ltd (ADR) ADR TEVA are developing competing mAbs.

Goldman Sachs forecast five-year sales of around $650 million.

“We spoke with a neurologist at a leading academic headache center, who did not view current data supporting meaningful differentiation across CGRP agents,” Flanders said in a note. “However, she noted unmet need for new migraine therapies, was positive on overall CGRP efficacy and expected 25-percent to 33-percent uptake across eligible patients at her institution in four to five years.”

The estimates assume positive reimbursement conditions and the establishment of the long-term safety of the therapy. 

Price Action

Alder Pharma shares were down 2 percent at the time of publication Tuesday. 

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