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Wednesday: The Biotech Analyst Run Down

The topsy turvy market continues this week.  Monday saw a 1.2% decline in both the S&P 500 and NASDAQ.  Tuesday, equities rallied strongly on the back of some de-escalation in the trade wars.  Today, pre-market futures are down sharply as the yield curve has inverted, a possible sign of a coming recession.

Well, if nothing else, the markets are not 'boring' right now.  While we await for trading to get underway this Wednesday, here are four biotech stocks getting positive analyst mentions today.

Let's start with Stemline Therapeutics (STML).  This 'Tier 3' biotech concern just posted impressive Q2 results and today is maintained as a Buy with a $35 price target at H.C. Wainwright.  Here is their valuation methodology on STML.

Our estimated market value of the firm is $1.75B, which includes the asset value for tagraxofusp and 15% discount rate and 2% terminal growth rate. The probability of success is 66% for tagraxofusp in indications beyond BPDCN and 45% for SL-701. Assuming roughly 50.1M shares outstanding at the end of 2Q20, this leads to a 12-month price target of approximately $35 per share.”

Leerink Partners initiates Amarin (AMRN) as a new Outperform with a $26 price target.  Leerink's analyst 'sees the recent 20% pullback in the stock following news that the FDA will hold an advisory committee meeting to review the supplemental new drug application for Vascepa as offering a good entry point, as she believes that Vascepa's label expansion will be approved by the agency. If approved, the analyst thinks Vascepa sales can grow to over $4 billion in the U.S. at their peak. The analyst added that the November 14 FDA committee meeting and PDUFA date, which she thinks is likely to be rescheduled for late December, are two catalysts that could drive greater than 20% upside in Amarin shares'

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Next up is Agenus (AGEN).  B Riley FBR reissues their Buy rating and $5 price target today on AGEN with the following updated view on the company.

Agenus highlighted that it recently triggered the interim analysis for its CTLA-4-PD-1 combination and PD-1 monotherapy trials in patients with second-line cervical cancer on its earnings call last week (8/9), with data expected at a major medical conference later this year. The company remains on track to file regulatory submissions in 2H20, with the potential to file even earlier. We look forward to these data readouts, which could serve as catalysts for AGEN shares and validate the company’s platform. We reiterate our Buy rating and $5 PT.”

Finally, BMO Capital upgrades Horizon Pharma (HZNP) from Market Perform to Outperform.  They also lift their price target seven bucks a share to $36 after better than expected Q2 results.   BMO's analyst 'notes that the recent feedback from several rheumatologists has increased his confidence that Krystexxa will be a larger source of upside in the future, adding that he still sees the first half of 2020 launch of Teprotumumab as "very good". The analyst contends that Horizon's execution evolving the business has been "impressive" and the stock warrants a premium valuation'And those are four small cap concerns seeing positive analyst commentary as investors brace for a down opening this Wednesday morning.

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 today. 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.

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