ITCI - Intra-Cellular Therapies: Positive MDD Data And Commercial Momentum Make It A Buy

2024-04-30 04:38:06 ET

Summary

• The share price reaction of Intra-Cellular Therapies was not as strong as expected after the positive phase 3 results of Caplyta in major depressive disorder.
• Positive MDD results represent another de-risking event for the drug and should open up another large market for Caplyta, pending positive results from the second phase 3 trial.
• The company's commercial momentum remains strong, with strong sequential and YoY growth in the first quarter.
• Multiple generic manufacturers have filed ANDAs to market a generic version of Caplyta and the company will need to defend its intellectual property in court.
• Prevailing against generic manufacturers would put Intra-Cellular at the top of big pharma's M&A wish list.

Shares of Intra-Cellular Therapies ( ITCI ) are trading lower than I thought they would after the strong phase 3 results of lumateperone (Caplyta) as an adjunct treatment for major depressive disorder ('MDD'). The delta to placebo was on the higher side, but the positive results were not as surprising after last year’s successful results in a different study that I covered in late March 2023 . The sizable follow-on offering that was announced shortly after the results came may have satisfied the excess demand in the near term....

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