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09/15/17 04:00:00 PM
WORD ON THE STREET

Sage Therapeutics, Inc., Equifax Inc., Encana Corporation

Sage Therapeutics, Inc.(SAGE) : RBC Capital Markets said in a Thursday note it believes SAGE Therapeutics Inc (NASDAQ:SAGE) can still emerge from near-term catalysts as a mid-cap neuro leader. Accordingly, the firm initiated coverage of Sage Therapeutics at Outperform, with a $117 price target. At time of writing, shares were down 3 percent to $62.90. The Failed Trial The stock has been on a downward spiral since Sept. 12, when it announced top-line results from a late-stage study of brexanolone for the treatment of super-refractory status epilepticus did not meet the primary end point. From $88.52 on Sept. 11, the stock has lost about 27 percent. Analyst Brian Abrahams believes the negative data may be due to the challenging conduct, a heterogenous population and reliance on open-label prior studies, with limited context. Strong GABA Platform Rationale Despite the setback, Abrahams believes GABA platform's mechanistic rationale remains strong, and accordingly, he sees a favorable setup into multiple near-term data readouts. See Also: Attention Biotech Investors: September Ushers In Another Slew Of PDUFA Catalysts The analyst believes SAGE-217, an oral GBAB modulator, could expand the company's market opportunity and life cycle, given more robust patent protection and convenience vs brexanolone. "We see $2.8B sales opportunity for '217 or other orals if broadly successful," the analyst said. Significant Opportunity in PPD Meanwhile, RBC believes brexanolone data in post-partum depression, or PPD, would open up significant opportunity for SAGE, as Phase II data looks compelling for the firm. The firm sees 70 percent likelihood of the upcoming Phase III studies reaffirming its substantial benefits and support approvability. The firm estimates more than $650 million in peak PPD sales for brexanolone. Positives & Catalysts Abrahams sees the strong POC data for brexanolone in PPD, signals of on-target activity reduce risk for 217, potential of neuroactive steroids across a number of indications and multiple shots on goal with indications and compounds as major positives. As far catalysts, the firm said Phase III brexanolone PPD data due in the second half of 2017 and Phase II '217 readouts in PPD, MDD, ET, and PD due in the fourth quarter of 2017 could move the stock. "With a foundation of strong science in the emerging neurology field, POC data across indications, and many shots on goal, we believe SAGE could emerge as the next high-profile, high-opportunity mid-cap biotech," the firm said.



Equifax Inc.(EFX) : Analysts at Argus Research turned bearish on Equifax Inc. (NYSE:EFX) as the company's data breach could prove to be the "most serious" data-hack in history. Analyst Jasper Hellweg downgraded Equifax's stock from Buy to Hold with no assigned price target. Equifax's management hasn't handled the data breach very well, especially after its decision to offer its TrustedID Premier Service resulted in even more complaints as the terms of service initially disqualified customers from taking part in any class action lawsuits. Meanwhile, Hellweg noted several high-ranking executives sold large positions of their stock "far in advance" of the public acknowledgment of a data breach. While the argument can be made that the executives in question weren't aware of the data breach at the time of their stock sale, it could still "somewhat impact the public's perception" of the company. 'Fairly Valued' The 30-percent decline in Equifax's stock has now created a scenario where the stock is "fairly valued" close to $98 per share, Hellweg said, but the stock should also be viewed as "out of investor favor" for the time being. Equifax's stock has benefited from a long-term bullish pattern of setting higher highs and higher lows dating back to 2011. This pattern broke after the stock fell "sharply" in reaction to the data breach. "While we still believe the company has value based on its strong history, we would want to see better comments from management or stabilization in the credit reporting environment prior to moving the company back onto our BUY list," Hellweg concluded. Related Links: Where Is The Floor In Equifax Shares? After Hounding Wells Fargo, Elizabeth Warren Hones In On Equifax



Encana Corporation(ECA) : Bernstein said in a Friday note it expects Encana Corp (USA) (NYSE:ECA) to achieve growth every year for the next half decade after shrinking in eight years of the last decade, as the company's march toward the aggressive U-Turn production guidance begins. Accordingly, Bernstein upgraded Encana from Market Perform to Outperform and raised its price target from $10 to $14. Analyst Bob Brackett indicated he was concerned about the gassy nature of the wells at Montney and it being distant from most end markets. Additionally, he noted that the asset was diverse, ranging from a 3D range of lithology to fluid type. See Also: Oil Down 15% Year To Date; What's In Store For The Rest Of The Year? However, Brackett noted that the play is no longer distant to end-markets. Moreover, strong condensation demand by Oil Sands should help realization in line with oil price. After careful reviewing and modelling of Encana's Montney assets, the analyst said he had earlier underestimated the play as a condensate producer and now see it as a valuable portion of the company's portfolio. Bernstein estimates production growth of 26 percent in 2018 and 16 percent in 2019. The firm sees cash flow per share growth driving upside in 2018, while it clarified that it's not making a commodity call or a multiple re-rating. The firm views announcements of takeaway projects, evidence of return to growth in the fourth quarter results and a reiteration of 2018 outlook in the third quarter results as potential catalysts. "Key risks would be takeaway delays, Montney wells underperforming type curves, or execution errors," Brackett said.



 

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