With a market capitalization of $5.3 billion, BridgeBio Pharma (BBIO) is a mid-cap biopharmaceutical company that specializes in treating patients suffering from genetic diseases. The company has earned a "Strong Buy" rating from the analyst community thanks to its unique business model and promising pipeline. The U.S. Food and Drug Administration (FDA) recently approved its lead drug candidate, Acoramidis (brand name Attruby), which has the potential to be a blockbuster for the company.
Analysts believe that the successful commercialization of Acoramidis could boost its stock price to around $70, representing a 150% increase over the next 12 months. BBIO stock is down 31.5% year to date, while the S&P 500 Index ($SPX) is up 24%. Let’s find out if it is the right time to consider this biotech stock.
BridgeBio: A Rapidly Growing Biotech
BridgeBio’s most valuable asset is its extensive pipeline of therapies for rare and genetic diseases with significant unmet needs.
Investors should note that the company did have a product that was FDA approved, called Nulibry. However, BridgeBio entered an asset purchase agreement in 2022 with U.S. bio-pharma company Sentynl Therapeutic for the sale of Nulibry. According to the agreement, BridgeBio will receive cash payments for meeting certain regulatory milestones, as well as commercial milestone payments and tiered royalties.
Without Nulibry, its third-quarter revenue primarily stemmed from partnerships and licensing agreements, which totaled $2.7 million. BridgeBio now has another approved product that could significantly boost its revenue upon successful commercialization.
Following the third-quarter results, the FDA approved its lead candidate, Acoramidis (Attruby). This therapy is a TTR stabilizer for cardiomyopathy of wild-type or variant transthyretin-mediated amyloidosis (ATTR-CM), a debilitating and potentially fatal condition. The treatment’s goal is to reduce cardiovascular death and hospitalization, as observed in clinical trials. BridgeBio intends to launch Attruby in the U.S. by the end of 2024.
Following the drug’s approval, BridgeBio received a $500 million payment under its royalty funding agreement. It also expects to receive an additional $105 million in regulatory milestone payments following Acoramidis’ approval in European and Japanese territories. BridgeBio has partnered with Bayer (BAYRY) to market the drug in Europe following approval and with AstraZeneca’s (AZN) unit, Alexion, to market it in Japan.
According to Reuters, BridgeBio intends to charge $18,759.12 for a 28-day supply. This medication will compete with Pfizer’s (PFE) blockbuster, Vyndaqel. It has been on the market since 2019 and sells for $268,000 per year for an 80-milligram daily dose.
BridgeBio’s pipeline includes numerous candidates in late-stage clinical trials. BBP-418 is another well-known candidate in its pipeline. It is currently in Phase 3 trial and is intended to treat a specific subtype of muscular dystrophy. Infigratinib, an FGFR1-3 inhibitor for achondroplasia and hypochondroplasia, is currently in Phase 3 clinical trials. Plus, BBP-812 is in a Phase ½ clinical trial for adeno-associated virus gene therapy for Canavan disease.
While BridgeBio’s prospects look promising, investors should be aware of the risks associated with investing in a clinical-stage biotech stock. Clinical trials may be unsuccessful. And even if they are successful, regulatory approvals may take years. Furthermore, as a development-stage company, it has yet to reach profitability. BridgeBio’s high R&D expenses will result in consistent net losses, totaling $162 million, compared to $177 million the year before. To move forward with its pipeline, the company will need to secure ongoing funding. The company had $406 million in cash, cash equivalents, and short-term restricted cash at the end of the third quarter. Furthermore, the genetic disease market is becoming more competitive, and BridgeBio faces competition from larger pharmaceutical companies.
Is BBIO Stock a Buy on Wall Street?
Overall, on Wall Street, BridgeBio Pharma stock is a “Strong Buy.” Out of 16 analysts covering the stock, 14 have a “Strong Buy” rating, and two rate it a “Hold.” The average target price of $49.43 suggests the stock has upside potential of 76.6% above current levels.
Recently, H.C. Wainwright analyst Ram Selvaraju reiterated a “Buy” rating on BBIO stock with a price target of $49. The analyst believes the Acoramidis approval and positive developments in its late-stage pipeline could fuel the company’s growth prospects.
Similarly, Cantor Fitzgerald also maintained the same stance with a high price estimate for the stock at $70, which implies potential upside of 150% over the next 12 months.
I believe that $70 is not an impossible target for BBIO stock. Positive clinical trial results from its late-stage pipeline candidates next year could propel the stock to around $70. However, investors should consider the risks of investing in a developing mid-cap biotech company before making any decisions.
