NEW YORK (TheStreet) -- Shares of Ariad Pharmaceuticals (ARIA) are down 2.85% to $6.82 in pre-market trading after Credit Suisse downgraded the global oncology company to "underperform" from "neutral" and lowered its price target to $6 from $8.
"Launches [are] still tepid in U.S. and EU. Metrics for the re-launch suggest Iclusig is reserved for the sicker patients and this trend is not likely to change until ARIA provides new clinical data, which could be at least 18 to 24 months away," analysts said.
"ARIA estimates half of chronic myelogenous leukemia (CML) patients receiving Iclusig are chronic phase patients. We think the large majority of second line CML patients are T315I patients, indicating that doctors are reluctant to use Iclusig ahead of other approved TKIs in patients without resistant mutations," analysts noted.
"Near-term U.S. sales will benefit from the implementation of the new pricing strategy that doubled the 30 mg price. However, we think this will likely be short-lived and sales will face a drop in H2:15 when ARIA moves to true flat pricing," analysts added.
Separately, TheStreet Ratings team rates ARIAD PHARMACEUTICALS INC as a Sell with a ratings score of D-. TheStreet Ratings Team has this to say about their recommendation:
"We rate ARIAD PHARMACEUTICALS INC (ARIA) a SELL. This is driven by some concerns, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its disappointing return on equity and generally high debt management risk."