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

Chardan Capital names La Jolla Pharmaceutical Company (NASDAQ: 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.