Monday: Biotech Analyst Rundown

Jul. 15, 2019 8:38 AM ET | Includes: Akero Therapeutics, Inc. (AKRO), FOLD, MNOV, STOK


No man is exempt from saying silly things; the mischief is to say them deliberately. ―Michel de Montaigne

The S&P 500 hit another all-time high last week as investors have become confident a Federal Reserve quarter point rate cut in on the near term horizon.  Higher beta parts of the market did not fare as well.  The Russell 2000 ended slightly down on the week.  Biotech was hit with some uncertainty about coming efforts from the administration to control 'drug pricing'.



We tend to hit this sort of political silliness about this time in every election cycle.  Meanwhile, data from health consultancy IQVIA shows that net prices for drugs after rebates and discounts grew a mere 1.5% in 2018, which is lower than general inflation.  But then again, when have politicians and the vast majority of the media been concerned with actual facts?


While we await the market to begin a new trading week, here are four biotech stocks getting positive analyst mention today.


H.C. Wainwright reissues its Buy rating and $18 price target on Amicus Therapeutics (FOLD) and then provides a thorough read through of their valuation methodology.  

Valuation and risks to our investment thesis. Our 12-month, $18 price target on shares of Amicus is derived from a 13-year DCF-based, sum-of-the-parts analysis driven by: beta of 1.70; terminal growth rate of 0.5%; risk premium of 4.93%; estimated WACC of 10.8%; and tax rate of 12.5% beginning in FY 2030. 42% each, plus the two Batten disease programs programs at a combined 16%, make up our rNPV. For AT-GAA, we assume a POS of 70%, whereas for CLN6 we assume a 45% POS and assign a 10% POS for CLN3.”

Akero Therapeutics (AKRO) is initiated as a new Buy with a $34 price target at Roth Capital.  The analyst states 'the company's lead asset AKR-001 is "the new kid on the NASH block," the analyst believes it has a "promising future."

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Next up is Stoke Therapeutics (STOK).  This morning J.P. Morgan initiatesthe shares with a new Overweight and a $34 price target.  Morgan's analyst  'has a positive view of the company's proprietary platform, Targeted Augmentation of Nuclear Gene Output, which modulates pre-mRNA splicing to increase protein expression and believes 'TANGO' enables a differentiated approach to target genetically driven diseases.'


It should be noted that both Stoke and Akero both just came public.Finally, Medicinova (MNOV) is maintained as a Buy with a $22 price target at B Riley FBR which provides this update.

MediciNova, Inc. announced a positive Type C meeting outcome based on recent FDA feedback relating to Phase III program in secondary progressive Multiple Sclerosis (SPMS). This, in our view, represents the most favorable scenario where MNOV is required to conduct only a single Ph. III trial and can focus on studying its lead drug, MN-166 (ibudilast), in a target population that (1) currently has no FDA-approved treatment options, (2) represents a sizeable patient pool, and (3) is enriched for increased probability for MN-166 to demonstrate clinically meaningful efficacy based on prior Ph. II data.

And those are four small cap concerns garnering some analyst 'shout outs' today.


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Thank You & Happy Hunting,


Bret Jensen

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


I swear, the reason for full moons is so the gods can more clearly see the mischief they create. ―Michael J. Sullivan, Age of Myth

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© 2023 by Bret Jensen.