H.C. Wainwright analysts are convinced these three biotech stocks are worth a lot more than their current market values. All have recently been given price targets that suggest they could nearly double your money, or better. Here's why these analysts are willing to stick their necks out and predict huge gains ahead for Catalyst Pharmaceuticals (CPRX), Amarin Corporation (AMRN), and Ocular Therapeutix (OCUL).
Catalyst's Upcoming PDUFA Is a Major Catalyst
As the PDUFA goal date of November 28, 2018 for Firdapse in Lambert-Eaton Myasthenic Syndrome (LEMS) is approaching, H.C. Wainwright analyst Andrew Fein expects to see a straightforward nod from the FDA. As such, Fein reiterates a Buy rating on CPRX stock with a price target of $6.00, which implies an upside of 108% from current levels.
Fein wrote, "We point to several notable efforts in anticipation of an approval that positions the company for a “swift and efficient” launch: (1) the Chief Commercial Officer Daniel Brennan joined the firm in June this year to lead the commercial team. He has previous launch experience (four specialty orphan products) in the rare neurology space at Lundbeck, which we believe he can leverage in Firdapse launch in a similar setting; (2) one of the near-term priorities is to transition LEMS patients in the expanded access program to the commercial product, which we think could constitute the first bolus of patients; and (3) ongoing commercial infrastructure building, including sales force hiring/training, market access, patient service etc., which should ready the company for commercialization in the months ahead."
Furthermore, "Given that formal FDA approval will mark the "official" end of the Jacobus debate, we think Catalyst shares may react in an outsized fashion to the announcement of approval. Moreover, we note that given the significant number of companies who have publicly expressed interest in neuro assets, Catalyst may well mark an easy "bolt on" for a number of companies with market caps in the $2-10B range seeking additional commercial assets."
Amarin: Is the Recent Pullback a Good Buying Opportunity?
Amarin stock has dipped after varying responses from investors who were tuned into data reports from the company's cardio-vascular REDUCE-It presentation. Amarin presented data last weekend at Chicago’s American Heart Association conference to show evidence that its fish-oil capsule called Vascepa improves cardiovascular health for those who suffer from elevated triglyceride levels. The data was also published in the New England Journal of Medicine and some investors interpreted the results negatively, suggesting AMRN is exaggerating the cardiovascular benefits of the pill. The notion comes from a trial that was performed using a mineral oil placebo — and the results between patients taking the placebo and those who took the fish oil were marginal.
Regardless of the recent setback, Andrew Fein isn’t skipping a beat. The analyst says the clinical data surpassed his expectations. This spurred Fein to reiterate a Buy rating on AMRN stock, while raising his price target from $31 to $51, which represents nearly 187% from Thursday's closing price. (To watch Fein's track record, click here)
The analyst addresses the skepticism around Vascepta that caused the stock to tumble: “With regard to the placebo (mineral oil) controversy, we view it as temporary noise that has been given an oversized weight by the bears. We are not aware of any strong evidence supporting that mineral oil contributed to the worsened outcome on the placebo arm. At most, we believe it mounts to speculation and hypothesis of the potential physiological activity of mineral oil without any clinical validation of such claims. In any case, the possibly minimal biological activity of the placebo arm would not negate the robustness of the results, in our view. We expect the placebo issue to be raised during the FDA review, but do not believe it would negatively impact the regulatory outcome.”
Ocular Therapeutix: A J-code for DEXTENZA Highly
On Monday, EyePoint announced that the Centers for Medicare and Medicaid Services (CMS) had assigned a specific and permanent reimbursement J-code (J1095) through the Healthcare Common Procedure Coding System (HCPCS) for DEXYCU (dexamethasone intraocular suspension) 9%, an injectable steroid administered after ocular surgery to control inflammation.
H.C. Wainwright analyst Ram Selvaraju believes that this is an exceptional event, as J-codes are usually issued to drugs used in office-based procedures and not to drugs associated with cataract surgery, which are reimbursed within a package price.
"The fact that DEXYCU gets a J-code indicates that CMS has changed its stance on steroids used in ocular surgery and is now willing to allow separate reimbursement for novel products in this category, in our view. We believe this is a de-risking event for Ocular Therapeutix’s DEXTENZA (dexamethasone insert) 0.4mg, which has a Prescription Drug User Fee Act (PDUFA) date of December 28, 2018. There has been doubt among investors on how DEXTENZA can be reimbursed after a C-code expires in three years. With a J-code issued to DEXYCU, which is clearly a product that cannot be dissociated from cataract surgery, we believe it is highly likely that DEXTENZA could also secure a J-code after regulatory approval. We continue to believe that DEXTENZA could obtain FDA approval by the end of 2018, and the company may apply for a C-code as well as a J-code with CMS after FDA approval," Selvaraju wrote.
In the wake of this update, Selvaraju maintains a Buy rating on OCUL stock, with a price target of $10.00, which implies an upside of 87% from current levels.