Erik, I found a Needham bullish report at YMB but I can't authenticate that it's real or recent...there's no date nor name of analyst attribution..it appears in line with Needham's take back in January(in the post I'm replying).
Telik, Inc. (TELK) – Strong Buy
TELK: Will the ASSIST Trials Work? Will TELCYTA be Approved? What is the Market Opportunity? Reviewing These Issues and Reiterating STRONG BUY, $33 Target Price
Results from all three ASSIST trials are expected to be released simultaneously—we believe later this month. We maintain that Telik will be able to submit an NDA application if any of the three trials reaches the primary outcome in a statistically significant and clinically relevant manner. In this note, we review the market opportunity for TELCYTA and the basis for our confidence in Telik’s development strategy for TELCYTA.
We believe the company has done its homework, testing TELCYTA in 13 Phase 1 and 2 trials. Based on the design of the three Phase 3 ASSIST trials, we are optimistic about TELCYTA’s potential. We also believe that the regulatory risk associated with ASSIST-3 is real, but may be overstated. Specifically, we believe the recent FDA workshop on ovarian cancer endpoints reflected the FDA’s recognition of the need for new therapies for platinum-resistant/refractory ovarian cancer patients. We also note the precedence for response rate as the basis for approval of Doxil and Hycamtin in ovarian cancer. Based on prior clinical data, we also believe ASSIST-3 has the highest probability of clinical trial success.
We are optimistic towards ASSIST-1 given prior clinical data and note the minimal regulatory risk associated with this 3rd line ovarian cancer trial should it meet its primary endpoint. Finally, while we are encouraged by the Phase 2 NSCLC data, we note the hurdle for demonstrating a survival advantage in ASSIST-2 in the 3rd-line NSCLC setting is substantial.
If the trials are positive, we project Telik’s peak revenues (WW sales) of TELCYTA in ovarian cancer to be ~$406 MM in the second-line setting, and $175 MM in the third-line ovarian setting. Likewise, we conservatively estimate ~$320 MM in peak US sales in the third line NSCLC setting. In all, we believe TELCYTA has the potential to reach more than $1B in WW peak sales, not including potential upside from a potentially positive outcome from ASSIST-5 in ovarian cancer (underway) and ASSIST-4 (planned in NSCLC) or trials in other settings (currently planned). Based on these assumptions in market opportunity, we believe the stock has substantial upside. |
