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Oppenheimer initiates Outperform rating on Agile Therapeutics, sees FDA approval of Twirla contraceptive

Published: 11:08 07 Jun 2019 EDT

twirla
Oppenheimer predicts Twirla could drive sales of $250 million to $300 million

Oppenheimer is bullish on Agile Therapeutics Inc (NASDAQ:AGRX).

Analysts on Friday initiated an Outperform rating on the company’s stock with a $5 price target, saying they’re confident the US Food and Drug Administration will approve its flagship product Twirla — a low-dose prescription contraceptive delivered through the skin via the company’s proprietary patch.

“We encourage risk-tolerant investors to build a position ahead of the FDA action date” that’s expected on November 16, the analysts wrote.

Agile’s stock recently traded up 9.7% to $1.13 a share following the release of the Oppenheimer note.

READ: FDA accepts Agile Therapeutics's new drug application for contraceptive patch Twirla

The Princeton, New Jersey-based women’s health-care company announced last month that the FDA has accepted for review its new drug application resubmission for Twirla. The company had originally resubmitted an application for FDA approval in June 2017, but the agency issued a Complete Response Letter (CRL) in December 2017.

Analysts said Agile appears to have settled its issues with the FDA and Twirla could be a big revenue-maker for the company.

“We believe the regulatory boxes have essentially now been checked for once-weekly female contraceptive patch Twirla to garner approval this November following a recent, successful FDA-mandated clinical study,” analysts wrote. “We expect safety and user experience advantages to existing patch to readily drive conversion, implying sales of $250-300M from this segment alone.”

Currently there’s only one FDA-approved contraceptive patch available to women — Xulane, which is produced by Mylan Pharmaceuticals Inc (NASDAQ:MYL).

Analysts noted Xulane's issues with high estrogen levels and possible blood clots. They also think women will find Twirla more user-friendly than Xulane, which had gross sales of $271 million in 2018.  

“Safety aside, we expect the user experience with Twirla to be superior to that with Xulane,” analysts wrote.

Liking Agile's management

Oppenheimer also expressed confidence in Agile’s management team and “clean capital structure” based on the company’s success in raising $8 million this year through a private placement. 

“Management brings broad and substantial pharma industry experience, including key commercial roles within the contraceptive category,” analysts wrote.

Twirla is designed to be applied once weekly for three weeks, followed by a week without a patch. The company has eight patents covering Twirla. Its active ingredients are ethinyl estradiol, a type of synthetic estrogen, and levonorgestrel, a type of progestin.

Disclaimer: Oppenheimer expects to receive or intends to seek compensation for investment banking services from Agile in the next three months. 

Contact the author: patrick@proactiveinvestors.com

Follow him on Twitter @PatrickMGraham

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