Pharmacyclics (PCYC) Soars On Analyst Blessings

Shares of Pharmacyclics (PCYC) soared recently, after the companyâ s pipeline of experimental small-molecule treatments for cancer and immune system diseases gained the blessing of analysts at Deutsche Bank and JPMorgan Chase (JPM). Pharmacyclicsâ drug, ibrutinib, is widely believed to on the way to a guaranteed FDA approval, thanks to positive clinical study results -- where the drug showed 68% and 71% response rates of mantle cell lymphoma and chronic lymphocytic leukemia, respectively.

Daily Chart Ibrutinib is currently licensed to Johnson & Johnsonâ s JNJ subsidiary Janssen Pharmaceuticals, and is designated as a breakthrough therapy for patients with chronic lymphocytic leukemia, mantle cell lymphoma, and Waldenstromâ s macroglobulinemia. The major potential of this drug, however, is for the treatment of chronic lymphocytic leukemia, the most common type of adulthood leukemia which affects one in every 113,000 people in the United States. Mantle cell lymphoma, by comparison, affects 5,000 people annually. The growth potential of these treatments has convinced Wall Street that shares of Pharmacyclics, which trade at a whopping 133 times trailing earnings, could be undervalued at current prices. Deutsche Bankâ s Robyn Karnauskas stated that Wall Street was underestimating the growth potential of ibrutinib, which she anticipates could hit peak sales of $9 billion -- making it one of the best-selling drug treatments in history. Karnauskas currently has a $170 price target on the company, indicating a 26% rally from current prices. JPMorgan, on the other hand, didnâ t report its estimates to the public, although it has been reported that the company currently has an overweight rating on the stock, with a more modest $142 price target. Shares of Pharmacyclics should keep climbing as analysts raise their price targets. In addition, the company has posted five positive revisions to its estimates over the past several weeks, and increase its earnings consensus estimates twice over the past two months. Although Pharmacyclics is still a clinical stage company, it reported a whopping 2,476% year-over-year growth in revenue last quarter on collaboration revenues. The company currently has $505 million in cash and equivalents -- which translates to only $6.90 in cash per share. However, the company has a clean balance sheet and the stock has risen 110% over the past twelve months and 6,500% over the past five years. Lastly, if analysts projections are correct, $9 billion in peak sales means that this stock is grossly undervalued at current prices. Other News About Pharmacyclics Pharmacyclics Hits New High As Bulls Launch Coverage Can anything slow down Pharmacyclicsâ ascent? Why Pharmacyclics Inc. Shares Soared Why did Pharmacyclics just pop? Other Stocks in the News Candy Crush Maker is Going Public Will it be the next Zynga (ZNGA)? Is Wells Fargo Posed for Big Things in the Near Future? According to analysts, the answers depends on how you feel about the housing market. Copyright 2013 by, Inc. InvestorGuide has no control over the sites we link to, is not affiliated with these sites, and cannot take responsibility for their quality or suitability. The news, analysis, commentary and profile information is not meant to be comprehensive, and the data provided is not guaranteed to be accurate. WebFinance Inc., the publisher of this newsletter, is not a registered investment advisor or a broker/dealer. This is not a stock recommendation newsletter but rather a source for investment ideas, and we encourage you to fully research any company before considering investing. The opinions expressed herein are those of the author and do not necessarily represent the views of nor are they endorsed by WebFinance Inc. No employee of WebFinance has owned or currently owns any shares in the company described above. The above is neither an offer nor solicitation to buy or sell any securities. The trading of securities may not be suitable for all potential readers of this newsletter, and the purchase of stocks mentioned in this newsletter may result in the loss of some or all of any investment made. We recommend that you consult a stockbroker or financial advisor before buying or selling securities or making investment decisions. We are not responsible for claims made by advertisers and sponsors. Anyone who makes decisions based on what they read here does so at their own risk and cannot hold WebFinance Inc. (DBA, Inc.) or its employees responsible.

Published on Sep 30, 2013
By Leo Sun
Leo Sun
Leo Sun is a freelance finance writer and position trader. He focuses on a combination of value and momentum investing, with a strong interest in the trading philosophies of Warren Buffett and Peter Lynch. Leo also has experience writing articles to help small business owners acquire loans and manage their finances. He regularly contributes to the Stock of the Day analysis.

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