The Biotech Analyst Run Down For Wednesday

A democracy cannot exist as a permanent form of government. It can only exist until the people discover they can vote themselves largess out of the public treasury. From that moment on, the majority always votes for the candidate promising the most benefits from the public treasury, with the result that democracy always collapses over a loose fiscal policy--to be followed by a dictatorship.” ― Alexander Fraser Tytler Woodhouselee

The market was mixed on Tuesday.  The S&P 500 notched a small gain while the Russell 2000 gave back its slight rise on Monday.  The market is flat for the week despite the attacks on the massive oil processing facility in Saudi Arabia over the weekend.  All eyes will be on the Fed today which is expected to cut interest rates by a quarter of a point.

While we await the market to open this Wednesday, here are four biotech stocks analysts like this morning.

Late yesterday, Maxim Group reissued its Buy rating and $3 price on Cassava Sciences (SAVA) with the following commentary.  

Cassava announced the initiation of Phase 2b for its lead therapeutic candidate PTI-125 in mild-moderate Alzheimer’s disease (AD). The first two patients of the trial have been dosed. The Phase 2b initiation follows positive Phase 2a results (see note 9/9, LINK) in which a 100% responder rate and statistically significant reductions (p<0.001) in key AD biomarkers were noted, including an improved cerebrospinal fluid (CSF) P-tau to Aβ42 ratio (p<0.001), which has been found to correlate with cognitive deficiencies."

Piper Jaffray maintains its Overweight and $20 price target on Oxford Immunotec Global (OXFD).  Piper's analyst notes 'the company announced last night that it terminated its distributor agreements in China due to unacceptable performance.  As an alternative, the analyst believes Oxford will use a combination of direct selling and distribution for the Chinese market. This new approach should improve the company's overall revenue as it no longer has to pay transfer prices to distributors, but at the same time will likely lead to increased operating expenses. Importantly, Oxford's former distributor will be prohibited from selling latent TB tests in China, per their agreement'

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Next up is Oramed Pharmaceuticals (ORMP).  H.C. Wainwright maintains its Buy rating and $20 price target this morning with the following comments.

Valuation methodology, risks and uncertainties. 15% discount rate, a 75% probability of success for ORMD-0801, and peak annual sales of roughly $2.1B (on which we project double-digit percentage royalties), we derive a total rNPV of $200M within the diabetes indication.”

Finally, microcap NovaBay (NBY) gets a rare mention in the analyst community this morning.  Ladenburg Thalmann reissues its Buy rating and $1.10 a share price target on NBY which has an approximate $15 million market cap.  Ladenburg's analyst 'sees the company being better positioned to expand marketing efforts in the direct-to-consumer channel for its lead product, Avenova. He expects DTC to contribute upwards of 50% of Avenova revenue in 2020'And those are four small cap concerns getting some analyst 'shout outs' this Wednesday.

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Bret Jensen

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