Wedbush Initiates Blueprint Medicines At Outperform, Calls It A 'Template For Targeted Therapies'

Wedbush initiated coverage on Blueprint Medicines Corp (NASDAQ: BPMC) Friday with an Outperform rating and $41 price target.

Analysts led by David M. Nierengarten felt that the company’s differentiated approach combined “a highly-annotated novel proprietary compound library and target discovery engine to develop kinase inhibitors for difficult-to-drug kinases, with a focus on high selectivity.”

The company is focused on “utilizing its proprietary kinase inhibitor library and genomics expertise to develop highly selective kinase inhibitors against genomically defined cancers,” according to Nierengarten.

The analysts explained that cancer therapeutics had undergone a paradigm shift in the last decade that was “driven by advances in next-generation sequencing technologies and genomics.”

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The shift involved “moving away from cytotoxic drugs towards the specific targeting of individual proteins intimately involved in driving tumor survival and growth,” while the “rational use of these ‘targeted therapies’ in specific patient populations provides striking advantages over the traditional ‘one size fits all’ therapy approach,” the analysts said.

Nierengarten highlighted the company’s two lead programs. First, was “a small molecule inhibitor of KIT D816V, a key driver of systemic mastocytosis, and the highly homologous PDGFRα D842V kinase, which is a validated driver in 5-6% of GIST patients,” and the second lead program was “a highly selective small molecule inhibitor of FGFR4, a driver in approximately 30% of hepatocellular carcinomas (HCC)."

The company expected both its lead inhibitors to be in the clinic by the middle of 2015.

Blueprint Medicines was also developing “an inhibitor of RET fusions and predicted RET mutants in addition to other known and novel kinase fusions and resistance mutants,” according to the analysts.

The price target was based on a multiple of 8x estimated 2024 worldwide sales of BLU-285, BLU- 554 and RET fusion inhibitor, discounted back annually by 30 percent for BLU-285, 35 percent for BLU-554 and 50 percent for RET fusion inhibitor.

Blueprint Medicines Corp recently traded at $30.25, up 0.97 percent.