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Analysts Bullish On Heron Therapeutics Inc (HRTX) Following New Data

By Howard Kim

On September 28, Heron Therapeutics Inc (NASDAQ:HRTX) announced new data from the recently completed Phase 3 MAGIC study of SUSTOL (granisetron) Injection at the American Society of Clinical Oncology (ASCO) 2015 Breast Cancer Symposium in San Francisco, CA. SUSTOL is Heron’s lead product candidate for preventing chemotherapy-induced nausea and vomiting (CINV) associated with moderately emetogenic chemotherapy (MEC) or highly emetogenic chemotherapy (HEC). Two analysts following the company weighed in after the new data was released.

Yesterday, Boris Peaker from Cowen maintained an Outperform rating on Heron with a price target of $47. Referring to the huge drop in the Heron’s stock price over the past month and concerns around HTX-011, an injectable pain therapeutic, he said, “Investors have raised several issues following the HTX-011 Phase II data and the presentation on Sustol’s Phase III MAGIC study. Upon further analysis we believe these concerns are largely unwarranted and believe that the recent selloff in shares represents a good buying opportunity. We reiterate our Outperform rating for HRTX.”

Separately, Jonathan Aschoff from Brean Capital echoed similar sentiments. He said the steep drop in Heron shares is unwarranted. The analyst shared his views on all key issues that seem to be driving the negative sentiment among the company’s shareholders. Referring to safety concerns around HTX-011, he said, “HTX-011 can safely deliver higher bupivacaine doses than Exparel.” Exparel is local anesthetic from Pacira Pharmaceuticals.

Talking about ISRs being observed with Sustol, Aschoff said, “The essential elements of the Biochronomer polymer do not induce ISRs.” He added, “Even during the earlier Phase 3 experience with multiple doses, only 0.1% of patients discontinued due to an ISR, hardly a scary number. ISRs were also not an issue in the latest Phase 3 trial, however due to the more rigorous data collection this time given the, in our view, far more competent current management team, Heron saw a somewhat higher rate.” Aschoff currently has a Buy rating on Heron with a price target of $55.

As per TipRanks’ statistics, all the 5 analysts who have recently rated the stock have given it a Buy rating. The average 12-month price target for the stock is $54.6, an upside of 123% over current levels.