Puma Biotechnology Inc PBYI 0.37% investors got some major vindication Wednesday when the FDA’s Oncologic Drugs Advisory Committee voted 12–4 to recommend approval of neratinib for treatment of patients with early-stage HER2-positive breast cancer. Puma had plenty of doubters and short sellers out there, which have only fueled the stock’s massive 105-percent gain this week.
FDA Approval Almost Here
FDA approval for neratinib is all but certain at this point, Citi analyst Yigal Nochomovitz said. FDA oncology chief Richard Pazdur has been mostly quiet on neratinib, which is typically a sign he will not fight approval. Despite concerns over patient diarrhea, filing delays and modifications to trial designs, the neratinib efficacy data won over the panel.
Nochomovitz says FDA approval was the last major regulatory uncertainty remaining for neratinib, allowing much clearer modeling for the stock. While FDA labeling is still unknown, Nochomovitz said even the most conservative label leaves plenty of room for upside for Puma investors.
“Even if [the] label ends up only saying Stage 2+ HR+ pts, max I year from Herceptin (it will likely be broader), this is what we already model,” Nochomovitz said.
Citi’s Reaction
Citi has raised its price target for the Buy-rated stock to $105, but Nochomovitz said buyout speculation could drive Puma even higher.
Puma short sellers looking for an exit opportunity haven’t gotten a chance this week. After a 39.1-percent gain on Monday, Puma continued higher by 9.8 percent on Tuesday and jumped another 29.6 percent following the vote on Wednesday. Even on Thursday, investors were not taking…
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