Intra-Cellular Therapies Better Positioned For Success: Analyst Anticipates Positive Phase 3 Depression Trial Data

Needham increased the price target for Intra-Cellular Therapies Inc ITCI from $70 to $73, with a Buy rating, noting high expectations regarding major depressive disorder (MDD) readouts are partly incorporated in ITCI's share price.

The analyst anticipates MDD trial success but acknowledges the inherent risks in MDD by assigning it a 60% PoS. 

With the stock up 33% (vs. XBI +11%) since positive Phase 3 mixed features data, the analyst says some of the anticipated upside is already in the shares.

Compared to other adjunctive MDD studies, the analyst says Intra-Cellular's Phase 3 trials are better positioned for success.

Needham's analysis of IQVIA TRx trends indicates YTD monthly Caplyta TRx is growing at ~1.5k TRx/month, mostly unchanged from growth in 2022. 

Additionally, it estimates the growth could slow by 46% to ~850 TRx/month and still reach the upper end of management's $430-455 million guidance range. 

Caplyta (lumateperone) is indicated in adults for schizophrenia and depressive episodes associated with bipolar I or II disorder (bipolar depression) as monotherapy and adjunctive therapy with lithium or valproate.

Needham analyst sees no reason for Caplyta growth to slow sharply in the near term, with half of 2023 completed. It expects the management could raise guidance at 2Q earnings. 

It raised the 2023 Caplyta sales estimate to $467M, now the highest on the Street, but may still be conservative, assuming Caplyta growth slows by 10% to ~1.3k TRx/month for the remainder of the year.

Price Action: ITCI shares are up 0.79% at $63.98 on the last check Thursday.