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On Thursday, Cantor Fitzgerald reiterated its positive stance on BridgeBio Pharma (NASDAQ:BBIO), maintaining an Overweight stock rating and a price target of $95.00 - representing significant upside from the current trading price of $33.24. The $6.18 billion market cap company has shown strong momentum with a 27.44% return year-to-date. According to InvestingPro data, analysts maintain a bullish consensus on the stock, with several additional fundamental insights available to subscribers. The firm’s analysis addressed the complexities of Medicare drug coverage and how they relate to BridgeBio Pharma’s financial prospects.
The firm’s analyst pointed out that the majority of Medicare lives under Medicare Advantage (MA) and a significant portion of Part B patients without supplemental insurance may not have strong financial incentives to choose Part B drugs. This could also extend to incentives for Part D drugs. The analysis showed that 56% of Medicare lives under MA, along with 10% of Part B patients without supplemental insurance, and 28% of Part D plan patients are Low-Income Subsidy (LIS) recipients. According to the firm’s calculations, this means that 73% of patients are at least at parity, with 60% potentially favoring Part D. InvestingPro data shows the company maintains strong liquidity with a current ratio of 4.67, indicating robust ability to meet short-term obligations while pursuing its market strategy.
For the remaining 27% of patients not covered by these figures, the impact of drug costs on their maximum out-of-pocket (MOOP) expenses may be mitigated as many are likely to be on other medications that contribute to their annual $2,000 MOOP limit. This dynamic minimizes the financial impact of BridgeBio Pharma’s drug, Attruby.
Furthermore, the analysis highlighted that BridgeBio Pharma does not qualify for the small biotech Inflation Reduction Act (IRA) exemption for catastrophic coverage phase-in, which is a benefit available to some other companies. This was a previously unconsidered factor that could differentiate the company’s competitive position compared to others in the field who are able to take advantage of this exemption.
Cantor Fitzgerald’s assessment reflects a detailed understanding of the Medicare drug coverage landscape and its implications for BridgeBio Pharma’s drug marketability and financial incentives. The firm’s maintained Overweight rating and price target suggest confidence in the company’s ability to navigate these complexities. For deeper insights into BridgeBio’s financial health and growth potential, InvestingPro subscribers can access comprehensive analysis, including detailed Fair Value estimates and over 30 additional analyst insights. The platform’s exclusive Pro Research Report offers institutional-grade analysis of BBIO’s market position and future prospects.
In other recent news, BridgeBio Pharma has announced a $500 million offering of convertible senior notes due 2031, aimed at refinancing existing debt and enhancing its financial flexibility. The company plans to use the proceeds to terminate its current Financing Agreement, which involves significant interest payments, and potentially repurchase up to $50 million of its common stock. This move is expected to reduce interest expenses and improve operational flexibility. Additionally, Scotiabank (TSX:BNS) has raised its price target for BridgeBio to $52, citing the strong commercial performance of its drug Attruby for transthyretin amyloid cardiomyopathy (ATTR-CM). The drug has seen rapid adoption, with over 1,028 patient prescriptions reported, surpassing initial expectations. Piper Sandler also maintains a positive outlook on BridgeBio, reaffirming its $46 price target based on promising survey results from cardiologists regarding Attruby’s future uptake. Furthermore, BridgeBio’s European partner, Bayer (OTC:BAYRY), has received marketing authorization for acoramidis, known as Beyonttra, for treating ATTR-CM, which is expected to positively impact BridgeBio’s commercial performance in Europe. These developments indicate a period of strategic financial adjustments and potential growth for BridgeBio Pharma.
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