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Morning Market Musings: September 17th

Sep. 17, 2020 8:54 AM ETARWR, MCRB, QURE, SDC, XBI1 Comment
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Law is only a temporary fix for chaos, not the cure. The only cure for chaos is individual responsibility.”― Abhijit Naskar

Note: Going forward the Biotech Analyst Run Down will be called the Morning Market Musings.

We are back after a one week hiatus.  It certainly has been a good few days for the biotech sector.  Thanks in a large part to the $21 billion purchase by Gilead Sciences (GILD) of Immunomedics (IMMU) on Monday, 'animal spirits' seem to have perked up significantly around small and midcap biotech names with the SPDR Biotech ETF (XBI) rising nearly seven percent just in Monday trading alone and heading towards one of its best weeks of the year.

It wouldn't surprise me if we saw a bit of profit taking in today's session both for the sector and the market.  Pre-market futures are currently pointing to a down opening for equities across the board.

The Latest Post From The Biotech Maven

While we await the opening bell, here are four small healthcare plays that analyst firms like this Thursday.

Sere Therapeutics (MCRB) sees new commentary from an analyst firm for the second time this week.  Canaccord Genuity is reissuing its Buy rating and $38 price target this morning.  Monday, Oppenheimer took the same action with less optimistic $29 price target.

Data Point:

In New York an employer’s tax rate could rise from as low as zero to a maximum of 7.2% on each worker’s first $11,400 in earnings to pay for unemployment insurance next year to pay for the surge in unemployment this year. In New Jersey the range is 0.5% to 5.4% with taxable earnings three times as high at $34,400.

We have differing opinions on Arrowhead Research (ARWR) this morning.  H.C. reiterates its Buy rating and $90 price target while Leerink maintains its Hold rating and $31 price target on what remains somewhat of a 'battleground stock' within the analyst community.  The shares surged 40% in trading yesterday after the company disclosed its latest trial results.

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Stifel Nicolaus is raising its price target on SmileDirectClub (SDC) from $11 $14 this morning based on its analyst's '2021/2022 expense assumptions and EBITDA estimates. While the company has talked more about "controlled growth," it will still need to make significant progress on its expenses to materially ramp EBITDA in 2021/2022'.  Stifel is maintaining its Buy rating on the stock.

Factoid of the Day:

The Labor Department’s JOLTS report last week showing the U.S. had 6.6 million job openings in July—about as many as in December of last year.  While there are still about 2.5 unemployed workers for each job opening, that’s the same ratio as in January 2014, five years after the 2008-2009 recession. 

UniQure (QURE) which rose nine percent in trading on Wednesday has gotten a couple of analyst 'shout outs' this week.  Monday, Raymond James reiterated its Buy rating on QURE.  Late yesterday, Robert W. Baird reissued their Buy rating with $57 price target on the stock.  Baird's analyst states 'recent weakness in UniQure  is a buying opportunity as he believes competing FIX AAV GT AMT-061 which is partnered with CSL Behring, remains dominant in the hemB GT space. The weakness was caused by Pfizer's (PFE) estimate of the market opportunity but he believes those estimates may be fair for Pfizer but not for uniQure's AMT-061.'

And those are four small healthcare stocks getting the nod from the analyst community as we are poised to start trading Thursday.

It's an irony that the people break laws and create disorder while agitating against the poor law and order situation.”― Ravi Ranjan Goswami

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Bret Jensen

Founder, The Biotech Forum, The Busted IPO Forum & The Insiders Forum

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