Bank of America Just Gave Pfizer a Price Target Increase for This Reason

Pharma giant Pfizer has been given a price target boost by Bank of America this week, as well as a reiterated “buy” rating.

Analyst Jason Gerberry of Bank of America believes that Pfizer is positioned to benefit from some key second-half catalysts.

The analyst boosted his price target from $45 a share to $48 a share and cited the revision to higher estimates, with double-digit EPS growth in the 2020-2023 timeframe and pipeline optionality.

In a note to investors, Gerberry wrote that Pfizer may soon transform from being a fringe player in the orphan drugs to a mainstream company. Gerberry gave three upcoming catalysts in the segment.

One catalyst he sees is the Vyndaqel launch in cardiomyopathy, citing bullish feedback of KOL physicians on immediate conversion of existing U.S. patients.

He also said that long-term orphan drug launch analysis suggests scope for market expansion and in turn upside to BofA’s above-consensus forecast. The analysts estimates peak sales of $2 billion for Vyndaqel.

Another catalyst is DMD gene therapy candidate ‘9926 for which a Phase 1 data readout is scheduled for mid-2019. Gerberry believes that if the data is positive, Pfizer can directly launch a Phase 3 trial by year-end 2019, same as the timeline for the lead competitor Sarepta Therapeutics Inc.

Catalyst number three is Phase 3 data for rivipansel in Phase 3 sickle cell anemia.

These three catalysts could lead to 3-6 percent valuation upside and possible re-rate on validation of orphan pipeline said the analyst.

Disclaimer: We have no position in Pfizer Inc. (NYSE: PFE) and have not been compensated for this article.