Is this U.S.-China selloff a buy? A top Wall Street voice weighs in
On Tuesday, Piper Sandler adjusted its stance on Intra-Cellular Therapies (NASDAQ:ITCI) stock, downgrading it from Overweight to Neutral while simultaneously increasing the price target to $132 up from $107. This move comes in response to the recent announcement that Johnson & Johnson will acquire Intra-Cellular Therapies.
The adjustment reflects the proposed acquisition price, with the analyst noting the significance of the transaction following a recent settlement that allows for the entry of a generic version of Caplyta by July 1, 2040. This settlement, detailed in a note from January 10, 2025, was seen as a key factor in clearing the way for the acquisition, especially considering the projected sales potential of Caplyta for major depressive disorder (MDD) and bipolar depression, which could exceed $4 billion. The company's strong revenue growth of 46.08% and "GREAT" financial health score from InvestingPro underscore its market position.
The analyst pointed out that the roughly 39% premium over Intra-Cellular Therapies' closing stock price on January 10, 2025, should more than adequately compensate for the drug's revenue potential and the expected substantial cost synergies post-acquisition. Given this perspective, Piper Sandler does not anticipate a higher bid for the company.
Intra-Cellular Therapies has been in the spotlight due to Caplyta, its product aimed at treating mental health conditions such as MDD and bipolar depression. The analyst's comments suggest that the recent developments, including the acquisition and the settlement regarding Caplyta's generic version, have been pivotal in reevaluating the company's stock value and market position.
In other recent news, Intra-Cellular Therapies is in the spotlight with a series of important developments. RBC Capital Markets analysts have highlighted potential risks to biotech companies, including Intra-Cellular, due to the resignation of Dr. Patrizia Cavazzoni from the U.S. Food and Drug Administration (FDA). Analysts are monitoring for any broader changes that could influence companies with active FDA engagements.
Intra-Cellular Therapies has also been the subject of analyst adjustments. Morgan Stanley (NYSE:MS) downgraded the company's stock rating to Equalweight from Overweight following the announcement of Johnson & Johnson's planned acquisition of Intra-Cellular at $132 per share. Concurrently, Mizuho (NYSE:MFG) Securities raised the stock's price target from $100 to $140, maintaining an Outperform rating, following a favorable patent settlement for Intra-Cellular's Caplyta.
BofA Securities also raised the price target on Intra-Cellular to $118 from the previous $110, maintaining a Buy rating, in response to the same patent settlement. 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.
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