On Monday, Mizuho (NYSE:MFG) Securities updated its financial outlook for Intra-Cellular Therapies (NASDAQ:ITCI), increasing the stock's price target from $100 to $140 while maintaining an Outperform rating. The stock, currently trading at $94.87 and near its 52-week high of $98.39, has shown remarkable momentum with a 16% gain in the past week. The adjustment follows the recent announcement of a patent settlement for Intra-Cellular's Caplyta, which exceeded expectations according to the firm.
The settlement, revealed last Friday, allows for a potential first generic launch of Caplyta in 2040. Mizuho's analysis now excludes the possibility of generic competition for Caplyta in their forecast period from 2025 to 2037, a significant change from the previous assumption that generics would emerge in 2036.
This amendment to their forecast is expected to result in an additional $10 billion in sales and positions Caplyta as a product that could potentially reach $6 billion in peak sales. InvestingPro data shows the company's strong financial position, with a current ratio of 7.66 indicating robust liquidity to support growth plans.
The patent settlement is seen as a major positive for the pharmaceutical company, as it not only enhances the commercial prospects of Caplyta but also strengthens Intra-Cellular's overall position as an attractive strategic acquisition target. Reports have surfaced suggesting that Intra-Cellular could now be in the sights of a major pharmaceutical company for a takeover.
Mizuho's analysts underscored the importance of the settlement, noting that it should provide an immediate boost to Caplyta's market potential. Additionally, they highlighted Intra-Cellular's solid fundamentals and the fact that the new price target suggests approximately 50% upside potential from current levels. This optimistic outlook underpins the firm's reiteration of the Outperform rating for Intra-Cellular Therapies' stock.
In other recent news, Johnson & Johnson is reportedly in discussions to acquire Intra-Cellular Therapies, a biopharmaceutical firm specializing in central nervous system disorders. Concurrently, Intra-Cellular Therapies also announced a favorable patent litigation settlement with Sandoz (SIX:SDZ), which allows the latter to sell generic versions of Caplyta, a medication for bipolar depression, starting from July 2040.
This development prompted BofA Securities analyst Jason Gerberry to increase the price target on Intra-Cellular Therapies to $118, while maintaining a Buy rating for the company's stock.
Intra-Cellular Therapies also reported positive outcomes from a recent study evaluating lumateperone as a maintenance treatment for adults with schizophrenia. The study revealed that lumateperone significantly extended the time to relapse for patients compared to a placebo.
Moreover, the company's Q3 2024 net sales of its flagship product, CAPLYTA, totaled $175.2 million, marking a 39% surge compared to the same quarter in the previous year. This growth led the company to raise its full-year 2024 net sales guidance to a range of $665 million to $685 million.
Intra-Cellular's stock has been rated Outperform by Mizuho, following a 13% stock rise post-earnings. Analysts have noted Intra-Cellular's strong financial position, with $1 billion in cash and investments as of September 30, 2024.
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