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Monday: Biotech Analyst Run Down

Men build too many walls and not enough bridges. ― Joseph Fort Newton

The market will try to get off the mat after last week's late swoon triggered by the announcement of additional upcoming tariffs on China.  This particularly hurt the high beta parts of the market.  The sector had one of its worst days of trading Thursday after oil priced plunged following the tariff announcement.  The Russell 2000 posted a loss of just over three percent last week.  Small biotech  stocks sold off hard on Friday as the entire market seemed to go into 'risk off' mode.

Futures are down today as the Chinese Yuan has sunk under the 7 level.  In the meantime, here are four biotech stocks getting positive analyst mentions today.

Stemline Therapeutics (STML) is picking up analyst support after a much better than expected second quarter earnings report last week.  H.C. Wainwright reissues its Buy rating and $35 price target on STML this morning and as this to say on its valuation methodology.

As we roll forward the DCF analysis, our estimated market value of the firm has increased to $1.60B vs. the previous $1.53B, which includes the asset value for 15% discount rate and 2% terminal growth rate. The probability of approval ascribed to SL-701 is 45%. Assuming roughly 45.1M shares outstanding as of mid-2020, this leads to a 12-month price target of approximately $35 per share.”

This weekend, Cowen & Co. also maintained a buy rating on Stemline.  We just published our post Q2 take on this small cap concern a few hours ago on our sister feed 'The Busted IPO Forum'.  

JMP Securities is giving Teleflex (TFX) a big price target boost after Q2 results.  They maintain their Outperform rating on TFX but raise their price target $70 a share to $395.  JMP's analyst states the 'quarter was "particularly impressive" as organic growth accelerated from Q1 into a double-digit range and he believes that the stock should continue to appreciate given the management's efforts to boost profitability through "restructuring initiatives and manufacturing excellence programs."

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Next up is Spring Bank Pharmaceuticals (SBPH).  This small developmental firm is reiterated as a Buy with a $16 price target on B Riley FBR after the company posted Q2 results and gave a business update last week.  Here is Riley's updated view on the small cap firm.

Pharmaceuticals released 2Q19 financial results and provided a corporate update, mainly relating to its clinical developmental plan for inarigivir  in Hep-B and SB1125, its STING (STimulatory or INterferon Genes) agonist, in oncology. The stock has considerably underperformed YTD (-56% vs. +20% for XBI), primarily driven by lack of dose-dependent response in surface antigen (HBsAg) reduction in the Phase 2a ACHIEVE trial in HBV patients presented at EASL ’19. At these levels, the current EV ascribes very little value to SBPH’s otherwise expanding pipeline, including notable progress being made on (1) irig with Ph. II CATALYST program initiation and (2) SB11285 with recently accepted IND filing. Additionally, strong cash position of $49.2M is sufficient to sustain OpEx/CapEx through 1Q21.”

Finally, we have GlycoMimetics (GLYC) which seems to have become a 'battleground' stock after last week's key trial failure. Stifel Nicolaus ($14 price target) and H.C. Wainwright reiterated Buy ratings.  Jefferies ($6 price target), SunTrust Robinson ($5 price target) and Piper Jaffray ($6 price target) all downgrade GLYC to a Hold.

And those are four small cap concerns in the sector getting some analyst 'shout outs' this Monday.

We just put out a new trade idea this morning using a simple at the money buy-write strategy. It involves a gene editing concern that is set up to deliver a return in the high teens in less than six months even if the underlying stock doesn't move. If you are registered to receive our weekly free reports, you would have received this in your 'in' box before the bell. If you are not signed up yet for this free service, just click HERE to download that latest report. This action will also ensure you receive all future free reports as published as well.

Thank You & Happy Hunting,

Bret Jensen

Men are driven by two principal impulses, either by love or by fear. ― Niccolò Machiavelli, The Discourses

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