Citizens JMP has reiterated its 'outperform' rating on US biotech firm Crinetics Pharmaceuticals, driven by what analysts describe as a 'strong start' for its newly approved drug Palsonify. The drug, which targets rare endocrine disorders, has shown better-than-expected prescription volumes in its first quarter on the market, according to a research note released this week.
Crinetics shares closed at $52.40 on Wednesday, up 1.8% on the day, giving the company a market capitalisation of roughly $4.2bn. The stock has gained approximately 12% since the start of the year, comfortably ahead of the Nasdaq Biotechnology Index, which has risen 7% over the same period. Analysts at Citizens JMP have set a price target of $68, implying further upside of nearly 30%.
The positive assessment centres on Palsonify's commercial trajectory. The drug, approved by the US Food and Drug Administration last autumn, treats acromegaly and other growth hormone disorders. Early sales data suggest physician adoption is accelerating, with weekly prescriptions climbing steadily since launch. 'We see a clear path to blockbuster status if current trends hold,' the Citizens note stated. 'The launch execution has been near flawless.'
For UK investors, the story is relevant primarily through exchange-traded funds and investment trusts with exposure to US biotech. The iShares Nasdaq Biotechnology UCITS ETF, popular among British retail investors, holds Crinetics as a mid-weight position. Pension funds with global equity mandates may also have indirect exposure. The broader biotech sector has been volatile this year, with interest rate sensitivity weighing on high-growth names, but Crinetics' product-specific catalyst has insulated it from some of that turbulence.
Analysts caution, however, that the stock remains highly dependent on Palsonify's continued commercial success. 'The next two quarters will be critical,' said one City analyst not involved in the Citizens note. 'If the ramp sustains, the upside is substantial. But any signs of a slowdown in prescription growth could trigger a sharp correction.'
Source: Citizens JMP research note; Nasdaq data.