With the biotech space having its usual volatile ups and downs this year, the analysts at Stifel have stepped back into the coverage world and have reinitiated research analysis on some of the top stocks to buy in the sector. It is not uncommon for Wall Street firms to periodically suspend or eliminate research coverage on a sector. Most often it happens when the analyst or analysts covering the sector leave the firm.
The Stifel team has a well-rounded group of six stocks rated at Buy for investors to consider, from one of the biggest mega-cap market leaders to smaller stocks with tremendous potential and upside. For three, in fact, the Stifel target price would represent a 100% gain for investors.
Biogen Idec Inc. (BIIB) is the in-class leader in the sector and a top pick at Stifel. Its report points out that Biogen is by far and away the leader in the development and marketing of therapeutics that treat multiple sclerosis (MS). Current MS treatments are starting to make a big change as patients are now switching from injectables to oral drugs. Biogen's Tecfidera stands to be a big winner, as it has shown to have fewer side effects than its competition.
With an incredible pipeline to treat a variety of additional conditions, the stock is well liked across Wall Street, with 16 other firms having rated the stock a Buy. The Stifel price target for Biogen is $376. The Thomson/First Call consensus price target is $371.95. Biogen closed Tuesday at $345.84 a share.
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Acorda Therapeutics Inc. (ACOR) posted very good second-quarter numbers that beat analyst estimates for earnings and revenues, while maintaining the expected forward guidance. The company's top product is its FDA-approved drug Ampyra, which is designed to improve walking in patients with MS. The company has two additional FDA-approved drugs, but they contribute much less compared to Ampyra's annual revenue. The Stifel team expects the company to expand the use of Ampyra for other conditions.
The Stifel price target for the stock is $47, and the consensus target is at $38.58. The stock closed Tuesday at $31.70.
Kite Pharma Inc. (KITE) is a smaller biotech company looking to become a leader in immune oncology by expanding its attempts to commercialize Chimeric Antigen Receptor T-cell (CAR-T) therapies for cancer. While the FDA approval for the company's top pipeline product may not come until 2018, it may be the very first of its kind on the market, with potential sales in excess of $1 billion.
The Stifel price target for the stock is $31, and the consensus target is at $33.33. Shares closed Tuesday at $23.59.
Argos Therapeutics Inc. (ARGS) is one of the three stocks that Stifel resumes coverage on that could be a huge home run for investors. The company is focused on the development and commercialization of fully personalized immunotherapies for the treatment of cancer and infectious diseases using its Arcelis technology platform, which allows patients to be treated with their own activated dendritic cells that have been exposed to a complete set of potential tumor antigens. The company’s lead drug, AGS-003, is a vaccine for renal cell carcinoma, and it is in Phase 2 trials in combination with Sutent. The data is showing extended survival versus historic data of Sutent alone.
The Stifel price target for the stock is a gigantic $16, and the consensus target is even higher at $17.50. The stock closed Tuesday at $7.30 a share.
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BIND Therapeutics Inc. (BIND) is another stock to buy at Stifel that could be a gigantic winner for investors. The company is a clinical-stage nanomedicine platform company developing Accurins, its novel targeted therapeutics. BIND intends to leverage its Medicinal Nanoengineering platform to develop a pipeline of Accurins, initially in oncology, as well as in collaboration with other biopharmaceutical companies. BIND’s lead drug candidate, BIND-014, is an Accurin that targets PSMA and contains docetaxel, a clinically validated and widely used cancer chemotherapy drug.
The Stifel team likes the solid financial collaboration deals that BIND has signed with big pharmaceutical partners. The Stifel price target is a whopping $20, and the consensus target is much higher at $25. Shares closed Thursday at $9.71.
Discovery Laboratories Inc. (DSCO) is a specialty biotechnology company focused on advancing new standards in respiratory critical care. Its technology platforms include a novel proprietary KL4 surfactant, a synthetic, peptide-containing surfactant that is structurally similar to pulmonary surfactant, and proprietary drug delivery technologies being developed to enable efficient delivery of aerosolized KL4 surfactant. Discovery Labs' strategy is initially focused on neonatology and improving the management of respiratory distress syndrome in premature infants. Stifel feels the pipeline at the company centered around FDA-approved Surfaxin can expand beyond current infant use to other respiratory disorders. The estimate for the current market for the drug is in the $150 million to $200 million range.
Stifel has a $5 target for the stock, and the consensus target is also lofty at $4.83. The stock closed Tuesday at $1.75.
While Stifel is now back into the biotech world, most of these stocks are very aggressive investments, and they are only suitable for very risk-tolerant portfolios. Failure in clinical trials or a no vote from the FDA on products could send the shares plummeting. However, success in clinicals and approvals from the FDA could bring a huge winner home.