2 Biotech Stocks Under $5 With Blockbuster Potential

A lot can change after a single trip around the sun. While COVID-19 has had a devastating impact on the economy, CFRA’s chief investment strategist, Sam Stovall, thinks that the Read More... The post 2 Biotech Stocks Under $5 With Blockbuster Potential appeared first on TipRanks Financial Blog.

2 Biotech Stocks Under $5 With Blockbuster Potential

A lot can change after a single trip around the sun. While COVID-19 has had a devastating impact on the economy, CFRA’s chief investment strategist, Sam Stovall, thinks that the market will continue to stage a recovery, with stocks returning to all-time highs in the next year.

“In other bear markets going back to 1929, and the average 13-month advance was 50%. We have a very good possibility of retracing our steps and challenging the old high,” Stovall stated. He estimates that the S&P 500 will reach the 3,435 mark in the next twelve months, which from current levels, would reflect a 17% pop as well as surpass the 3,393 high-point hit back on February 19.

That’s not to say the reopening of the economy won’t bring about a second wave of COVID-19 infections, but Stovall argues that even if this occurs, the U.S. government’s huge stimulus packages should mitigate the impacts. “We’ve had a lot of people compare it with the crash of ’29, the depression of the 1930s, etc. But back then, you had the government actually tightening their reins, balancing their budget — you did not have a reactive Federal Reserve. Whereas today, you have the exact opposite,” Stovall explained.

With this in mind, investors are scanning the Street for compelling plays, hoping to snap up stocks before share prices set off on an upward trajectory. For more risk-tolerant investors, penny stocks, or names trading for less than $5 per share, are taking center stage. Not only do you get more bang for your buck, but also even minor share price appreciation can result in major percentage gains. However, other market watchers believe that these bargain prices are too good to be true, noting there could be a very good reason a particular ticker is trading at such low levels.

Taking the risk into consideration, we used TipRanks’ database to pinpoint two penny stocks within the healthcare sector that look especially promising; each boasts a “Strong Buy” consensus rating from the analysts and sky-scraping upside potential.

Strongbridge Biopharma ()

With one rare disease asset, Keveyis, already available and a Phase 3 candidate, Recorlev, Strongbridge could potentially transform the treatment paradigm. Bearing this in mind, ahead of the upcoming Recorlev data release in the third quarter of 2020, several members of the Street believe that its $2.86 share price reflects the ideal entry point.

In a recent update, management stated that the Phase 3 LOGICS data readout for Recorlev in Cushing's syndrome is right on track, with 41 out of 42 patients having already completed the randomized withdrawal phase. In addition, another patient should be enrolled any day now.  

According to Oppenheimer’s Hartaj Singh, there is a “clear path to top-line data in 3Q20," noting that the completion of 41 patients suggests that the COVID-19 disruption will have a limited impact on the quality of the data. Singh also thinks that the Recorlev supply should be enough to last throughout the trial. The 5-star analyst added, “Following a positive readout, an NDA submission for Recorlev could be filed within ~six months, after which a standard 10-month review cycle would be expected. We anticipate a launch in late 2021/early 2022.” To this end, the data readout could drive massive upside.

Despite the fact that SBBP faces competition, Recorlev's profile is clinically relevant, in Singh’s opinion. “Recorlev's profile could not only convert ketoconazole switches but also the existing branded products. From our physician research, we found the dissatisfaction with pasireotide (Signifor), whose diabetes risk is contraindicated with Cushing's, as an opportunity for disruption. In this vein, we believe the improvements on metabolic and other metrics can be particularly meaningful for Recorlev commercially,” he commented.

Singh also points out that Cushing's launch could benefit from the ultra-orphan primary periodic paralysis (PPP) market. “The successful efforts to build strong patient support services and management are likely to translate well into Cushing's, a population which can be challenging to manage due to the complexity of their disease, co-morbidities, and high unmet need,” he noted.

As Singh believes SBBP is an “underappreciated name with significant risk/reward potential," he reiterates an Outperform (i.e. Buy) rating, along with a $6 price target, which implies a 104% upside potential from current levels. (To watch Singh’s track record, )   

Turning now to the rest of the Street, other analysts also like what they’re seeing. 3 Buys and no Holds or Sells have been assigned in the last three months, making the consensus rating a Strong Buy. At $12, the average price target puts the upside potential at a whopping 320%. (See Strongbridge stock analysis on TipRanks)

Selecta Biosciences ()

Our second pick is Selecta Biosciences, which is working on overcoming immunogenicity with its innovative ImmTOR immune tolerance platform. With top-line data from the COMPARE Phase 2 study of its SEL-212 candidate in severe gout expected in Q3 of this year, the analyst community thinks that at $3.24 apiece, now is the time to snap up shares.  

Weighing in on SELB for Canaccord, five-star analyst John Newman sees the upcoming data readout as a major catalyst for shares. “We expect SEL-212 to show a large and statistically significant improvement for serum uric acid control vs Krystexxa in COMPARE, which should move the stock significantly higher during 3Q20. We believe the study is highly powered to show a statistically significant benefit for SEL-212,” he stated.

Newman also argues that the data from patients that didn’t receive all of the infusions should still be factored into the results. Expounding on this, he said, “Also, very importantly, patients who drop out of the study due to a missed infusion should still be included in the study, in our view, meaning study powering should not be affected. This is the same statistical treatment used in the original Phase 3 Krystexxa studies.”

Looking more closely at the baseline serum uric acid (SUA) enrollment requirements, they are identical for both the SEL-212 and Krystexxa arms. According to Newman, this means the efficacy difference will be clearly interpretable. It should also be noted that SELB did change the baseline SUA measurement in order to accelerate enrollment, but as both arms were equally impacted, the analyst thinks the alteration is irrelevant.

While some investors expressed concern regarding COVID-19's impact on the data readout, half of the patients had already completed the study as of April, and flexibility regarding the location of blood draws and infusion frequency limits the impact as well.

To this end, Newman left his Buy rating and $13 price target unchanged. Should this target be met, a twelve-month gain of 301% could be in the cards. (To watch Newman’s track record, )

What does the rest of the Street think about SELB’s long-term growth prospects? It turns out that other analysts also have high hopes. Only Buy ratings have been received in the last three months, 7 to be exact, so the consensus rating is a Strong Buy. Not to mention the $7.83 average price target implies 139% upside potential. (See Selecta stock analysis on TipRanks)

To find good ideas for stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights.

The post 2 Biotech Stocks Under $5 With Blockbuster Potential appeared first on TipRanks Financial Blog.

Source : Tip Ranks More   

What's Your Reaction?

like
0
dislike
0
love
0
funny
0
angry
0
sad
0
wow
0

Next Article

Moderna Spikes 21% Amid “Positive” Early-Stage Covid-19 Vaccine Data

Shares in Moderna Inc. (MRNA) shot up 21% after the biotech company reported “positive” interim clinical data for its experimental coronavirus vaccine. The stock soared 21% to $80.47 in early Read More... The post Moderna Spikes 21% Amid “Positive” Early-Stage Covid-19 Vaccine Data appeared first on TipRanks Financial Blog.

Moderna Spikes 21% Amid “Positive” Early-Stage Covid-19 Vaccine Data

Shares in Moderna Inc. () shot up 21% after the biotech company reported “positive” interim clinical data for its experimental coronavirus vaccine.

The stock soared 21% to $80.47 in early morning U.S. trading. The clinical stage biotech company said that the Phase 1 study of its novel coronavirus vaccine candidate (mRNA-1273) produced antibodies that would be able to “neutralize” the virus in patients. In addition, different doses of the vaccine given to patients resulted in an increase in immunogenicity, while also triggering an immune response in the body.

“These interim Phase 1 data, while early, demonstrate that vaccination with mRNA-1273 elicits an immune response of the magnitude caused by natural infection,” said Tal Zaks, Chief Medical Officer at Moderna. “When combined with the success in preventing viral replication in the lungs of a pre-clinical challenge model at a dose that elicited similar levels of neutralizing antibodies, these data substantiate our belief that mRNA-1273 has the potential to prevent Covid-19 disease and advance our ability to select a dose for pivotal trials.”

Moderna said that mRNA-1273 was generally found to be safe and well tolerated, with a safety profile consistent with that seen in prior Moderna infectious disease vaccine clinical studies. The company expects the Phase 3 trial to start in July, subject to the finalization of the clinical trial protocol.

"The Moderna team continues to focus on moving as fast as safely possible to start our pivotal Phase 3 study in July and, if successful, file a BLA,” said Stéphane Bancel, CEO at Moderna. “We are investing to scale up manufacturing so we can maximize the number of doses we can produce to help protect as many people as we can from SARS-CoV-2.”

The interim clinical data of the mRNA-1273 Phase 1 study was led by the National Institute of Allergy and Infectious Diseases (NIAID), which is part of the National Institutes of Health (NIH).

Last week, Moderna announced that the mRNA-1273 vaccine candidate was granted fast track status by the U.S. Food and Drug Administration (FDA). The fast track designation is awarded to speed up the regulatory review of the vaccine candidate.

Since the start of the year, the value of Moderna’s shares has quadrupled.

Following the report, five-star analyst Salveen Richter at Goldman Sachs raised Moderna’s price target to $105 from $63 and maintained a Buy rating on the shares.

Although analysts have a Strong Buy consensus rating on Moderna stock based on 9 Buys and 2 Holds, its recent rally means that the $61.40 average price target now indicates 26% downside potential from current levels. (See Moderna stock analysis on TipRanks).

Last week, Yasmeen Rahimi, analyst at Roth Capital said that with the near-term start of a Phase 2 study for its Covid-19 vaccine, the company remains the front-runner in getting a vaccine to pivotal trials with potential approval by 2021. Rahimi has a Buy rating on the stock with a $68 price target.

Related News:
Europe Could Conditionally Approve Gilead’s Remdesivir In Next Few Days
Gilead Signs Remdesivir Licensing Agreements With Five Drugmakers
AstraZeneca Aiming For 30M UK Covid-19 Vaccine Doses By September

The post Moderna Spikes 21% Amid “Positive” Early-Stage Covid-19 Vaccine Data appeared first on TipRanks Financial Blog.

Source : Tip Ranks More   

This site uses cookies. By continuing to browse the site you are agreeing to our use of cookies.