The holy grail for a biopharma company is to get a drug approved and out to market, a feat achieved by few, considering the rigorous demands of regulators. However, that win is only half the story. Once a drug gets the go ahead, the real test begins, as it must prove there is enough demand for it.

Biotech company ChemoCentryx (CCXI) is hoping the market reacts favorably to TAVNEOS, its treatment for anti-neutrophilic cytoplasmic autoantibody (ANCA)-vasculitis (AAV) – a rare and painful disorder which leads to inflammation and can even destroy small blood vessels.

The FDA gave its nod of approval in October, following which the drug was launched later in the month.

Wells Fargo’s Yanan Zhu caught up with the company’s management team recently to check on its progress.

In 4Q21, Tavneos managed to amass more than 100 unique prescribers, and there have already been multiple prescriptions for a number of patients.

While Zhu notes the pandemic has negatively impacted the launch – particularly regarding restriction in access to centers of excellence – the analyst believes access to top prescribers at centers of excellence should improve over time.

“We would also note that the initial prescriber metrics for TAVNEOS measure up quite well against another drug launched in the orphan renal disease space during the pandemic,” the analyst went on to say.

A key focal point for some concerns the payor coverage front. Here Zhu believes the “initial evidence bodes well for broad payor coverage.”

CCXI’s initial strategy is to get patients on TAVNEOS as quickly as possible with most of the initial patients on 30-day free drugs, with some of them “having converted to payor coverage.” While this will cause revenue to trail, the higher the number of patients that can get on TAVNEOS, the “more can be converted.”

The fact this is an orphan disease, and payors recognize the unmet needs in ANCA-associated vasculitis and the pharmacoeconomics savings from TAVNEOS, the coverage on TAVNEOS would only be a “small fraction of the payers’ budget.”

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All in all, then, Zhu rates CCXI stock an Overweight (i.e. Buy) backed by a $62 price target. This target conveys his confidence in CCXI's ability to climb ~102% from current levels. (To watch Zhu’s track record, click here)

One skeptic aside, all 6 other recent analyst reviews are positive, providing the stock with a Strong Buy consensus rating. The average price target is even more optimistic than Zhu’s; at $77, the figure suggests shares will be changing hands for ~151% premium a year from now. (See ChemoCentryx stock forecast on TipRanks)

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Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.

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