Blueprint Medicines is Tuesday's IBD Stock Of The Day. Shares are breaking a trendline, giving investors an early entry within a flat base.
The company is known for its cancer treatment, Ayvakit. Ayvakit has Food and Drug Administration approval to treat a form of stomach cancer and two types of mastocytosis, a rare disease in which mast cells accumulate in the body's tissues.
Investors are closely watching the launch of Ayvakit in patients with indolent systemic mastocytosis (ISM). Management was exuberant on the first-quarter call, claiming sales "knocked it out of the park," Leerink Partners analyst Andrew Berens said in a May report.
"The company highlighted the beat, driven by strong patient demand, a broad prescriber base, low discontinuation rates with high compliance and a favorable payer mix," Berens said. "In addition, the company indicated that the international launch is picking up pace, with a robust start in Germany."
In the aftermath, Blueprint Medicines shares surged almost 13% on May 2. From there, the stock has traded sideways, forming a flat base with a buy point at 111.02, according to MarketSurge. But shares are now bouncing off their 21-day line and breaking through a trendline, offering an early entry.
Blueprint Medicines: Strong First-Quarter Report
Analysts were enthusiastic following Blueprint Medicine's first-quarter report. Ayvakit generated $92.5 million in sales, crushing FactSet-polled analysts' forecast for $79.6 million.
The company also earned $1.45 per share, walloping expectations for a loss of $1.67 and reversing from a loss of $2.15 per share in the year-earlier period.
But Leerink's Berens said guidance for $390 million to $410 million in full-year sales "suggests a markedly steep drop-off in patient adds for the remainder of the year." Still, that's up from previous guidance for $360 million to $390 million.
"During the (question and answers) session, management denied that they expect a drop-off in patient adds, attributing the variability to multifactorial drivers and uncertainties, which we think has led to investor speculation that guidance may be intentionally conservative," he said.
Berens upgraded Blueprint Medicines stock to a market perform rating from underperform. He raised his price target to 97 from 50.
Pipeline Updates Remain Key
Blueprint Medicines is also working on a next-generation treatment for ISM and medicine for chronic hives. Further, the company is testing multiple approaches to breast cancer.
This month, Blueprint said a three-drug regimen containing its experimental breast cancer drug, BLU-222, was well tolerated with no meaningful drug-drug interactions. The company expects to have an update in the second half of 2024, Wedbush analyst David Nierengarten said in a report.
Blueprint is also moving ahead with plans to test its drug BLU-808 in patients with chronic hives, a $3 billion-plus market, according to a recent company presentation. BLU-808 could also treat myriad other conditions, reaching a $26 billion market in 2030.
The company also expects to have the results of a study of its next-generation mastocytosis treatment in the second half of 2024.
Nierengarten kept his buy rating on Blueprint Medicines stock, but boosted his target to 130 from 97.
Highly Rated Biotech Stock
Blueprint Medicines has a strong IBD Digital Relative Strength Rating of 96 out of a best-possible 99. This means shares rank in the leading 4% of all stocks when it comes to 12-month performance.
Shares also have a Composite Rating of 93 on a 1-99 scale of a stock's fundamental and technical metrics.
Blueprint stock also belongs to the Tech Leaders list.
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