We haven’t discussed much on Myovant Sciences (MYOV) since way back in January when new CEO Dave Marek took over, notes John McCamant, biotech sector expert and editor of The Medical Technology Stock Letter.

Since then, the company’s has successfully launched relugolix (Orgovyx/Myfembree) in both prostate cancer and uterine fibroids in the U.S.

The company recently presented a very positive update on the launches at the recent Baird conference on September 15 and the upcoming opt-in by Pfizer (PFE) on ex-U.S. prostate cancer rights is due by the end of October. The company will also hold its upcoming quarterly call on October 26.

With a stock price that has mirrored the soft biotech tape, strong and improving fundamentals, $600 million in cash (plus >$100 million with upcoming milestone payments) and a relatively low $1.9 billion market cap, we recommend adding to positions at current levels.

Both Orgovyx and Myfembree are seeing strong month-over-month increases in prescriptions, payers and insurance coverage despite the difficulties of launching new drugs during a pandemic. The Myfembree launch with Pfizer just began at the end of June. And most first time users are on starter packs that will run out shortly.

Expect to see a major jump in sales by the end of 2021, and even greater follow through in 2022. For several reasons both drugs have the potential to dominate their respective blockbuster markets. As a reminder, the Pfizer deal is a powerful one, with synergistic product lines and a Big Pharma sales force. 

Finally, as things progress, we believe MYOV has all the attributes of an attractive takeover target — whether by Pfizer, Sumitovant or someone else.

Take advantage to add while it’s quiet and the stock is at the low end of its recent range despite the progress of the launch and an active M&A environment. The stock remains a buy under $30 with a target price of $45.

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