On Tuesday, RBC Capital sustained its optimistic stance on Intra-Cellular Therapies (NASDAQ:ITCI), reiterating an Outperform rating alongside a $103.00 price target. The firm's analysis indicates that the biopharmaceutical company is currently undervalued with an approximately $8 billion market capitalization. This valuation comes in the wake of Intra-Cellular's successful phase III studies for its drug Caplyta, which is designed to treat Major Depressive Disorder (MDD).
The firm supports its rating by highlighting the drug’s potential to significantly contribute to the company’s forecasted revenue of over $3 billion in future years. The expectation of Caplyta's market performance is based on its promising anti-depressive profile, which could distinguish it as a leader in its class.
Additionally, RBC Capital suggests that Intra-Cellular Therapies should consider purchasing a Priority Review Voucher (PRV). The firm believes that acquiring a PRV could be a strategic move for the company, as it may expedite the MDD drug launch by four months. This acceleration could potentially lead to a substantial increase in value, adding an estimated $650 to $700 million, or about $6 per share.
The analyst's commentary underscores the potential financial benefits of a PRV, which could outweigh its cost by granting Intra-Cellular Therapies an earlier entry into the market before the loss of exclusivity (LoE) for Caplyta. This earlier market entry could be crucial in maximizing the drug's revenue generation.
In conclusion, RBC Capital's position reflects a strong confidence in Intra-Cellular Therapies’ future performance, particularly with the anticipated approval and launch of Caplyta for MDD. The firm advocates for the company as a buying opportunity for investors, based on the projected revenue and the additional value a PRV could provide.
In other recent news, Intra-Cellular Therapies reported a significant increase in Q1 revenues for 2024, reaching $144.8 million, primarily driven by robust sales of Caplyta, its product used in the treatment of schizophrenia and bipolar disorder. In addition, the company's drug, Lumateperone, has shown promise in a recent study as an effective adjunctive treatment for Major Depressive Disorder (MDD).
The trial, involving 480 patients, demonstrated a significant reduction in depression severity compared to a placebo. These findings have prompted Intra-Cellular Therapies to plan for a supplemental New Drug Application (sNDA) to the U.S. Food and Drug Administration (FDA) in the second half of 2024.
RBC Capital has maintained an Outperform rating on Intra-Cellular Therapies, supported by a positive evaluation of the company's Caplyta patent estate. The firm's analysis suggests a potential $3 billion total out-year opportunity for Intra-Cellular Therapies if the MDD label expansion is realized. Intra-Cellular Therapies has also been proactive in expanding its sales force to support Caplyta, should it be approved for MDD.
InvestingPro Insights
RBC Capital's positive outlook on Intra-Cellular Therapies is further complemented by select metrics and insights from InvestingPro. With a market capitalization of $7.98 billion, Intra-Cellular is operating with a moderate level of debt and liquid assets that exceed its short-term obligations. Despite the company not being profitable over the last twelve months, it has demonstrated a strong return over the past month with a 15.3% price total return, and an impressive return over the last five years.
InvestingPro Tips indicate that while analysts do not expect the company to be profitable this year, the substantial revenue growth of 65.45% over the last twelve months as of Q1 2024 suggests a robust upward trajectory. Moreover, the company's significant Price / Book multiple of 13.31 reflects market expectations of future growth, aligning with RBC Capital's valuation. These financials are crucial for investors considering the potential of Caplyta and the strategic acquisition of a Priority Review Voucher.
For those looking to dive deeper into Intra-Cellular Therapies' financial health and future prospects, additional insights are available on InvestingPro. There are more InvestingPro Tips that can help investors make informed decisions. Use coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription, and gain access to these valuable tips.
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