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Monday: Biotech Analyst Rundown

Elections belong to the people. It's their decision. If they decide to turn their back on the fire and burn their behinds, then they will just have to sit on their blisters.”― Abraham Lincoln

The markets ended decently up last week despite a shakier than expected August Jobs Report. Investor enthusiasm was fueled by renewed trade talks between the U.S. and China trade talks as well as what is expected to be a quarter point rate cut by the Fed in mid-September.

Long time favorite Acadia Pharmaceuticals (ACAD) looks like it will be a big winner today. The shares are surging some 70% on the back of better than expected trial results. The stock had already surge nicely after a report by CNN on Nuplazid's safety issues cut the shares in half last summer. However, like most stories on CNN, it turned out to be a false narrative that unfortunately scared a lot of investors out of the stock.

As we start a new trading week, here are four biotech stocks analysts like this morning.

Cantor Fitzgerald reiterates its Buy rating and $104 price target on iRythm Technologies (IRTC).  Cantor analyst 'recommendeds investors add to positions following its announcement of a collaborative deal with Verily. The analyst said the deal adds to its addressable market and he believes more positive developments could be forthcoming with in the next 1-2 months regarding reimbursement.'

Citigroup states Amarin (AMRN) is an attractive 'buying opportunity' as it reissues its Buy rating on the stock.  Citi's analyst states 'Vascepa will likely be granted a cardiovascular risk reduction label shortly after the FDA panel meeting scheduled for November. This makes now an attractive time to buy the stock, Beatty tells investors in a research note. During a recent fireside chat, Amarin CEO John Thero highlighted two major upcoming sales inflection points, says the analyst. The first is the promotion of an expanded CV risk reduction label and the second is direct-to-consumer marketing, which the company expects to be able to begin six months after a label expansion, Beatty points out. The analyst believes this is likely to be a "powerful tool for patent education and physician education'

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Next up is Mirati Therapeutics (MRTX).  Jefferies upgrades the name from a Hold to a Buy.  It also raises its price target from $89 to $105.   The analyst at Jefferies 'believes the bar for initial Mirati data has been lowered after Amgen (AMGN) announced new data from the ongoing Phase 1 study evaluating AMG 510 in patients with previously treated KRAS G12C-mutated solid tumors. Pharmacokinetic variability could become a liability for Amgen, which opens the window wider for Mirati's MRTX849 to be "best-in-class'

Finally, H.C. Wainwright reiterates a Buy rating and $90 price target on Biospecifics Technologies (BSTC) with the following commentary.

We note that BioSpecifics, as the licensor of CCH, receives royalties from Endo by contract based on sales of CCH in all indications that Endo has in-licensed, including cellulite. As a reminder, cellulite affects 85-98% of post- pubertal females, and there is no FDA-approved injectable treatment for this condition in the aesthetics industry. We believe CCH could receive U.S. approval in 2H20 and generate over $2B in peak annual cellulite- based sales, thus substantially boosting the royalties paid by and firmly entrenching CCH as a durable blockbuster franchise, rivaling 2018 sales—in size. We believe that approval of CCH in cellulite should be far more impactful to BioSpecifics than Endo, since BioSpecifics is wholly dependent on this agent.”

Thank You & Happy Hunting,

Bret Jensen



Every Monday morning we put out new research on an undervalued small or midcap stock and then outline a simple covered call strategy that can produce a double digit return in coming months even if the underlying stock doesn't move. If you are registered to receive our weekly free reports, you would have received our latest trade idea in your 'in' box before the bell.

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