Blueprint Medicines Corporation

BPMC Details

Blueprint Medicines Corporation (NASDAQ: BPMC) is a worldwide precision therapeutic firm dedicated to developing life-changing treatments for cancer and hematologic disorders. AYVAKIT/AYVAKYT (avapritinib) and GAVRETO (pralsetinib) are now distributed to US and European patients.

Latest News:

• Inducement Program: BPMC stated on October 05, 2021, that it issued non-qualified stock options to acquire 24,068 shares of its common stock and 12,033 restricted stock units (RSUs) to eight new employees, effective October 01, 2021, under its 2020 Inducement Plan. Previously, on September 03, 2021, it announced the issuance of non-qualified stock options to acquire 23,720 shares of its common stock and 11,858 RSUs to 12 new employees, with effect on September 01, 2021.
• Transfer of Responsibilities: On July 01, 2021, BPMC transferred specific duties relating to GAVRETO's sales to customers, pricing, and distribution matters in the US to its collaboration partner. As a result, no net product revenue from GAVRETO product sales was recorded in Q3FY21.

9MFY21 Results:

• Significant Decline in Topline: BPMC witnessed a sharp decrease of 90.38% in its total revenues to USD 73.06 million during 9MFY21 compared to USD 759.63 million during 9MFY20 due to nil net product revenue from GAVRETO product sales in Q3FY21 and a decline in total collaboration revenue during the period.
• Rise in Net Losses: The company recorded a net loss of USD 325.40 million during 9MFY21 vs. a net income of USD 399.55 million during 9MFY20.
• Adequate Balance Sheet: As of September 30, 2021, the company had cash and cash equivalents (including short-term investments) of USD 701.88 million and no outstanding debt.

Key Risks:

• Dependence on Third-Party Suppliers: The firm relies on third-party vendors to manufacture its pharmaceuticals and does not have its manufacturing facilities. This may jeopardize its capacity to satisfy product demand and, as a result, its overall performance.
• Patient Enrollment Risk: If the company encounters delays or difficulty in enrolling individuals in clinical trials, it may delay or block the receipt of essential regulatory licenses, deteriorating BPMC's financial conditions.

Outlook:

• FY21 Estimates: BPMC indicated on October 28, 2021, that it expected its FY21 revenues to be in the range of USD 170 – 180 million. This projection is based on increased product revenue and good collaborative execution, with numerous milestone payments scheduled for Q4FY21.

Valuation Methodology: EV/Sales Multiple Based Relative Valuation

(Analysis by Kalkine Group)

* % Premium/(Discount) is based on our assessment of the company's NTM trading multiple after considering its key growth drivers, economic moat, stock's historical trading multiples versus peer average/median, and investment risks.

BPMC Daily Technical Chart (Source: REFINITIV)

Stock Recommendation:

BPMC's stock price has surged 32.14% in the past three months and is currently leaning towards the higher band of the 52-week range of USD 79.08 to USD 125.61. The stock is currently trading far above its 50 and 200 DMA levels, and its RSI Index is 73.03, indicating an overbought zone. We have valued the stock using the EV/Sales-based relative valuation methodology and arrived at a target price of USD 106.75.

Considering the uptick in the stock price, we believe the decent fundamentals are sufficiently reflected at the current trading levels. Hence, we recommend a "Sell" rating on the stock at the current price of USD 113.63, up 0.72% as of November 02, 2021, at 1:01 PM ET.

* The reference data in this report has been partly sourced from REFINITIV.

*All forecasted figures and industry information have been taken from REFINITIV.