With the launch of its leading GNRH blocking pill — Orgovyx (relugolix) — heading to a best-in-class prostate cancer drug, Myovant (MYOV) is a top pick for 2022, asserts Jay SIlverman, biotechnology expert and editor of The Medical Technology Stock Letter.
The latest quarter report of $18 million in sales were up almost 80% Q/Q (and despite the COVID spike limiting in person physician calls), and the drug is now annualizing at over a $100 million run rate.
The drug’s oral bioavailability versus injectable GNRH drugs will continue to add new patients but just as importantly convert existing prostate cancer patients to take a once-daily pill versus shots for Lupron which generated roughly $800 million in 2020.
Myovant’s second drug, Myfembree is also based upon relugolix, but is indicated for female conditions. It was approved last year for treating pain with uterine fibroids. The larger market of endometriosis is awaiting approval in U.S. and Europe.
MYOV stock was under pressure in 2021 when Pfizer, its U.S. marketing partner for Orgovyx and Myfembree, declined an option for select non-U.S. marketing rights. However, the decision was not due to drug but PFE’s internal strategic focus.
Myovant expects to sign another partnership for this geographic area sometime before the expected mid-year European approval. In our view, the deal will be both financially and strategically value-added. Potential suitors in our view are other leading injectable GNRH players such as Abbvie, Takeda or Astellas.
Not to mention, its majority owned partner Sumitovant has been rolling in its assets and Myovant is the last one that it has not acquired. In November 2020, it bought Urovant — another “vant” it had a majority ownership of — at a 96% premium to its stock price.
With over $650 million in cash, Myovant is well funded to maximize the development of relugolix with or without a new partner. The stock’s weakness since PFE declined its option, we believe, has created an attractive buying opportunity for 2022.
With a de-risked and already FDA approved, soon to be best-in-class drug in Orogvyx, and up-and-comer with various competitive advantages in Myfembree, plus a long list of value-enhancing catalysts, we recommend MYOV. Lastly, for reasons above we believe Myovant represents a potential biotech takeover for 2022. MYOV is a "buy" under $30 with a target price of $45.
