Tricida Post-IPO Run-up Makes Goldman Wary

Tricida Inc (NASDAQ: TCDA) shares have gained about 13.5 percent since their listing on June 28, on top of the nearly 37 percent gain made on the debut.

The Analyst

Citing the strong run up, Goldman Sachs analyst Dana Flanders initiated coverage on Tricida with a Neutral rating and a $32 price target.

The Thesis

Tricida's TRC101, a non-absorbed polymer meant to treat metabolic acidosis disease that accelerates the progression of chronic kidney disease, addresses a high unmet need, given there are no prior FDA-approved therapies for it and the current treatment options are contraindicated in most CKD patients due to co-morbidities, Flanders said in a Monday note.

The analyst estimates long-term risk-adjusted sales of $1.2 billion for TRC101, with a sales potential of $639 million by 2025. The analyst sees a list price of $18,000, with low-single-digit price increases over time. The treatment candidate is likely to be approved under the accelerated pathway in 2020, the analyst said.

Flanders sees potential for an inflection in uptake of TRC101 to mid-teens market share of mild-to-severe MA patients on positive outcomes data in 2022. This could also drive M&A interest in Tricida.

Price Action

Shares closed Monday at $29.25, down 0.8 percent.

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