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4 Notable Analyst Calls For Thursday

I love to talk about nothing. It's the only thing I know anything about.” ― Oscar Wilde

The biotech sector drifted down for the sector day in a row Wednesday to post small losses.  Today, we have a small acquisition.  Merck (MRK) is buyingImmune Design (IMDZ) for $300 million in cash.  This represents an over 300% premium to yesterday's closing price.  

Congrats to all fellow Immune holders, our patience paid off on this Busted IPO, finally.

With that, here are four small cap biotech concerns garnering some analyst praise this morning.

Jefferies sees upside potential in Ultragenyx Pharmaceuticals (RARE) after that company's Q4 results and conference call.  They reiterate their Buy rating and $81 price target on RARE this morning with the following commentary. 

The worldwide launch of Crysvita is ramping with Latin America offering an underappreciated opportunity and longer-term growth driver. Further, additional data in mid-2019 from the DTX401 and DTX301 gene therapy programs, were in focus on the call, and should further validate and support their potential."

H.C. Wainwright likes ADMA Biologics (ADMA) after it recently addressed its funding needs.  They reissue their Buy rating and $10 price target.  Here is their view on the new debt facility.  

We note that Perceptive Credit Holdings is an investment entity of Perceptive Life Advisors, which is one of ADMA’s largest institutional shareholders. In our view, Perceptive’s extension of credit to ADMA underscores the investor’s confidence in the company"

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Oppenheimer maintains its Outperform rating on Mesoblast (MESO) after a recent business update.  They do lower their price target by a buck a share to $14.  Here is their updated view on the company.

Wednesday, Mesoblast reported quarterly earnings and provided a business update. With dosing of the final patient in the Phase 3 trial of II-III heart failure (NYSE:HF) complete, we expect top-line results in ~12 months, which we view as a mission-critical catalyst. Mesoblast could also provide an update on the Phase 3 trial of MPC-06-ID in chronic back pain once all patients complete 12 month assessments in 1H19. Our thesis rests on the success of both programs. Separately, a pre-BLA meeting has been scheduled in April ahead of a registrational filing in pediatric GVHD. Due to uncertainty surrounding timelines for continued development of MPC-300-IV, we remove this program from our estimates. Reiterate Outperform but adjust our PT to $14 (from $15). "

Finally, a different analyst at Oppenheimer likes Aerie Pharmaceuticals (AERI) prior to that company reporting Q4 results.  She maintains her Buy rating and $64 price target on AERI in front of that report.  Here is what she is expecting on the conference call.

In anticipation of AERI earnings, to be reported on 2/25/19, we update our revenue and earnings expectations for 4Q18 to ~$11M and -$0.99 (vs. $14M and -$0.93 prior), respectively. While we remain interested in Rhophressa uptake trends and any color management may provide on gross to net stabilization for the product, we note our Outperform thesis is primarily driven by Rocklatan, which we expect could be launched in 2Q19 (PDUFA 3/14/19). As such, we will look for qualitative commentary on Rocklatan launch preparation, and management’s views on potential near-term impact to Rhopressa uptake with the upcoming launch. Importantly, we expect management to provide guidance on cash burn for the year; however, do not anticipate top-line guidance until after the regulatory action.”

And those are four small cap concerns winning some analyst praise before the opening bell this Thursday.

I went to a restaurant that serves "breakfast at any time" so I ordered French toast during the Renaissance.” ― Steven Wright

Thank You & Happy Hunting,

Bret Jensen

Author's note: I present and update my best small-cap biotech stock ideas only to subscribers of my exclusive marketplace, The Biotech Forum. Try a free 2-week trial today.

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