Today, we revisit Myovant Sciences (MYOV). The stock has a nice run since we took an in-depth look at it in late July and gave a 'thumbs up' to a 'watch item' position. Several significant news events have happened since that last research piece and it is time to look at this concern again in light of recent events.
Myovant Sciences is a United Kingdom-based healthcare company that came public in 2016. The company focused on women's health and prostate cancer. The company's lead product candidate is Relugolix, which is being developed to treat symptoms of uterine fibroids, symptoms of endometriosis, and advanced prostate cancer. The company's other clinical asset is MVT-602, which is designed to treat female infertility as part of assisted reproduction. The company has a marketing agreement with Takeda Pharmaceuticals International AG (OTCPK:TKPHF) for the exclusive, worldwide license, excluding Japan and other Asian countries, to develop Relugolix and MVT-602. Myovant Sciences has a market capitalization of just under $1.3 billion with the recent rally in the shares.
The trigger for the big spike in the stock price this week was Phase 3 trial data. Results showed that relugolix hit its primary efficacy endpoint and all six key secondary endpoints in men with advanced prostate cancer. In addition, five key secondary endpoints 'demonstrated superiority to leuprolide acetate, including rapid suppression of testosterone, rapid suppression of prostate-specific antigen, and suppression of follicle-stimulating hormone'.
This data should allow Myovant to file a NDA for relugolix in the second quarter of 2020. Marketing applications for Europe and Japan should then follow soon thereafter.
The company also announced in late October that itsnow has a five-year low interest $350 million facility in place to support the rollout of relugolis. Finally, the shares continue to see insider buying. A beneficial owner and founding shareholder just bought up just over $3 million in new shares in total via three transactions from November 19th through November 21st.
Analyst Commentary & Balance Sheet:
The company ended the third quarter with just over $150 million on the balance sheet. The credit facility was necessary as the company posted a net loss of just over $70 million in Q3. Announcement of the facility triggered a nice rise in the stock as shares were encountering a bit of headwind due to funding concerns which have been addressed for the time being.
After no analyst activity for months, three analyst firms, Cowen & Co., JMP Securities ($34 price target) and Goldman Sachs reiterated Buy ratings this week.
On August 19th, Leerink Partners initiated the shares as a new Outperform rating and $26. Leerink's analyst thought Relugolix could do $1 billion in sales in 2025 and that was before this week's readout in prostate cancer.
Myovant still has milestones on the horizon that could cause the recent rally to continue. The company should file a NDA around its Relugolix combo therapy for women with heavy menstrual bleeding and uterine fibroids in April of next year which will include data from a 12-month safety study. In addition, Myovant should have two late stage trial readouts for its Relugolix combo therapy for endometriosis-related pain in the first half of 2020. The company is also also developing MVT-602. This is an oligopeptide kisspeptin-1 receptor agonist, as a potential trigger of egg maturation in women undergoing assisted reproduction, including in vitro fertilization (IVF) that we did touch on in this analysis. It is in mid-stage development.
I am maintaining my 'watch item' position in Myovant as I think further upside could lie ahead. The pipeline seems more 'derisked' than when we did our last article in July. I probably would not be chasing the shares here after this week's big rally, but would add on dips if I did not already have a stake in this name. A buy-write option strategy is another possibility.
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