Ah yes, the joys of free enterprise, which is never free of anything be it taxes, bills, or stress.” ― E.A. Bucchianeri, Vocation of a Gadfly
The biotech sector started the new trading week on the wrong foot yesterday. The major biotech ETFs posted losses of between a half and one percent Monday. However, this was significantly off the sector's lows earlier in the day.
Futures are up nicely on some better than expected earnings reports pre-market. While we await the market to open this Tuesday, here are four biotech stocks getting positive analyst commentary from analysts today.
Cantor Fitzgerald reissues its Overweight rating and $8 price target on BioDelivery Sciences (BDSI) after that company made an acquisition recently. Here is their post purchase take on the small biopharma concern.
Post BDSI’s recent acquisition of U.S. commercial rights to Symproic, and equity raise, we are updating our model and reiterating our Overweight rating and 12-month price target of $8. BDSI has built a strong commercial team around Belbuca, and the acquisition leverages the company’s commercial strengths, and footprint, to grow its portfolio. We view the acquisition of Symproic as a positive as it diversifies the company’s revenue away from a single product, Belbuca, and can add a meaningful revenue contribution of $75MM + without the need for any significant increase in spending.”
The company's acquisition of Paragon "significantly increases the exposure to the rapidly growing biologic production market" which is "arguably the most attractive sub segment within the broader life science tools sector today." The analyst models the deal to be accretive by over 200bps to Catalent's revenue and EBITDA in the long term and potentially higher in the near term, adding that his price target assumes EBITDA multiple of 14-times - a 2-turn premium to the stock's long-term average. The analyst further notes that his "recent diligence" suggests that the "bullishness about the gene therapy market is warranted."
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Next up is Fibrocell Science (FCSC) which H.C. Wainwright reiterates a Buy rating and whopping $22 price target (the stock current trades around $2.50 a share). Here is the commentary from that analyst call.
Valuation and risks to price target achievement. We reiterate our Buy rating and $22 price target. We point out that the large delta between the current share price and our price target is driven by the company’s relatively low share count. Further, we believe that the current share price does not reflect, despite the low patient numbers, the ability of FCX-007 to address RDEB patients’ needs, as well as the accelerated potential from a regulatory standpoint, including a Priority Review Voucher (PRV).”
The stock was up over 40% Monday in trading on this news.
We think it’s already becoming clear that ibrex will eventually have a role to play as the only oral fungicidal therapy with activity against azole-resistant infections, to expand options for longer-duration therapy in the outpatient setting. With Candida glabrata widespread and largely multidrug-resistant, and Candia auris finally gaining widespread attention and alarm (mortality rate as high as 60%), as evidenced by prominent New York Times feature ten days ago, the acute need for an efficacious oral therapy to provide the necessary weeks to months of dosing, is obvious. That said, we think it’s still too soon to plot ibrexfungerp’s path to approval to treat such infections, or to project the commercial opportunity.”
And those are four small cap names getting analyst 'shout outs' this Tuesday.
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