On Wednesday, BofA Securities updated its outlook on Intra-Cellular Therapies (NASDAQ:ITCI) shares, raising the price target to $91 from $82, while maintaining a Buy rating on the stock. The adjustment follows the announcement of positive Phase 3 top-line results for the company's major depressive disorder (MDD) trial of Caplyta used as an adjunctive therapy.
The trial, known as Study 501, demonstrated a significant treatment effect compared to placebo. Notably, no outlier side effects were reported, according to the company's press release. With Caplyta's second MDD Phase 3 trial expected to report top-line results in late second quarter of this year, analysts at BofA Securities consider the drug's development to be de-risked.
The positive results have led to an increase in the probability of success (POS) for Caplyta's approval in MDD treatment to 95% from the previous 70%. BofA Securities forecasts that Caplyta could potentially add $1.1 billion in nominal peak sales, citing the large total addressable market (TAM) and the drug's differentiated tolerability profile.
The raised price objective to $91 per share is also attributed to adjustments for research and development costs, with Caplyta accounting for 98% of the price objective. BofA Securities reiterated its Buy rating, emphasizing the potential for additional de-risking from upcoming MDD updates and the possibility of expanded labeling for the drug.
InvestingPro Insights
As Intra-Cellular Therapies (NASDAQ:ITCI) navigates a pivotal phase with its Caplyta drug, a glance at the company's financial health through InvestingPro data reveals a nuanced picture. The company's market capitalization stands at a robust $7.73 billion, and it has experienced a remarkable revenue growth of 85.51% over the last twelve months as of Q4 2023. This surge in revenue is a testament to the company's potential in capitalizing on its recent clinical successes.
InvestingPro Tips highlight that while analysts do not expect ITCI to be profitable this year, the company's liquid assets surpass its short-term obligations, indicating a stable financial position for upcoming operational needs. Moreover, ITCI operates with a moderate level of debt, which may offer some flexibility as it invests in the development and potential market expansion of Caplyta. These insights are particularly relevant considering the raised price target by BofA Securities and the high expectations set for the drug's performance in the MDD market.
For investors looking to delve deeper into Intra-Cellular Therapies' financials and strategic outlook, additional InvestingPro Tips can be found at https://www.investing.com/pro/ITCI. These tips, alongside the real-time metrics provided, could offer valuable perspectives for those considering the stock. To access these insights, use the coupon code PRONEWS24 for an additional 10% off a yearly or biyearly Pro and Pro+ subscription. In total, there are 9 more InvestingPro Tips available that could further inform investment decisions.
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