David Lebovitz, an analyst from Citi, maintained the Sell rating on Blueprint Medicines (BPMC – Research Report). The associated price target was raised to $65.00.
David Lebovitz has given his Sell rating due to a combination of factors that raise concerns about the future performance of Blueprint Medicines. In the fourth quarter of 2023, Blueprint’s drug Ayvakit surpassed revenue estimates, demonstrating notable quarter-over-quarter growth, which was primarily driven by the uptake in Indolent Systemic Mastocytosis (ISM) cases. Despite this short-term success, Lebovitz notes a potential moderation in the growth trajectory towards the end of 2024 and beyond. He points out that the rate at which new patients are starting on Ayvakit suggests that the market’s growth rate could slow down significantly as the year progresses. Additionally, while the management of Blueprint Medicines has high expectations for Ayvakit, Lebovitz is skeptical that the peak sales will reach the company’s ambitious $2 billion goal.
Further contributing to the Sell rating is the overall financial position and outlook for Blueprint Medicines. The company’s fourth-quarter collaboration revenue showed a sharp decline year-over-year, mainly due to the termination of a key collaboration with Roche. R&D expenses have decreased due to pipeline reprioritization, but this is offset by a significant increase in SG&A expenses, attributed to the costs of commercializing ISM. While Blueprint’s cash position at the end of the fourth quarter was strong, the financial adjustments and forecasts for the upcoming year, including operating expenses and collaboration revenue, lead to a cautious stance. Lebovitz’s revised price target reflects a modest increase but still underscores his view that the stock is overvalued at its current levels, justifying the Sell/High Risk recommendation.
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Blueprint Medicines (BPMC) Company Description:
Blueprint Medicines Corp. is a precision therapy company. It focuses on medicines to improve the lives of patients with genomically defined cancers, rare diseases and cancer immunotherapy. The company was founded by Chris Varma, Nicholas B. Lydon, Brian Druker, and Alexis Borisy on October 14, 2008 and is headquartered in Cambridge, MA.
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