TipRanks ‘Perfect 10’ List: Strong Catalysts Confirm the Bull Thesis on These 2 Stocks
All investors are after gains, but in trying to find the right stocks to increase a portfolio’s value, are constantly inundated with massive amounts of data.
Thus, separating the wheat from the chaff is an arduous process but there are tools to help make sense of it all. TipRanks’ Smart Score is one. The tool collects all the info needed on any given stock and sorts it out into 8 different categories, all known to impact future performance. Combining those factors, they are then distilled into a single score – with the rankings going from 1 to 10.
Obviously, a Perfect 10 is a strong indicator the stock is a likely future winner. With this in mind, we’ve dug up the details on two names which have received the Perfect 10 rating. What’s more, both are not only considered Strong Buys by the analyst consensus but also have potential catalysts coming up. Here are the details.
Prothena Corporation (PRTA)
First up, Prothena, is a late-clinical-stage biotech company working in the field of protein dysregulation – that is, misfolded proteins – using this approach to develop new therapeutic agents for use in the treatment of rare and devastating neurodegenerative diseases, including such conditions as Parkinson’s and Alzheimer’s. Prothena’s research approach directly targets incorrectly folded proteins, to alter the disease course at a basic level.
The biggest recent news for Prothena was the 87% price spike the stock saw in one day this past September. Oddly, the company did not release any news itself at that time; rather, as a research biopharma working on treatments for Alzheimer’s, the company got a tremendous boost when a competitor, Biogen, released positive data on an Alzheimer’s clinical trial. Several companies involved in clinical work with Alzheimer’s drugs saw gains on that news.
Since then, Prothena has had some good news to report on its own. At the end of January, the company released positive topline data on PRX005, a novel anti-MTBR Tau antibody drug candidate under investigation for the treatment of Alzheimer’s. The data showed that single doses, across three different dose cohorts, were safe and well tolerated, meeting the goal of the study. The Phase 1 multiple ascending dose portion of this study remains ongoing, and the company expects to release data by the end of this year.
In an earlier notice, back in November, Prothena announced that it had achieved a major milestone payment related to its Phase 2 study of PRX004, a drug candidate developed in partnership with Novo Nordisk as a treatment for ATTR Cardiomyopathy. The payment came to $40 million, and Prothena is eligible to receive payments up to $1.2 billion related to this investigational drug program.
But leading the pipeline is a potentially best-in-class treatment for AL amyloidosis, birtamimab,. This candidate is the subject of Phase 3 studies, and the confirmatory data from the AFFIRM-AL trial is expected for release sometime next year.
Turning to the financial end, Prothena had cash holdings at the end of Q3 totaling $497 million. With quarterly spending – net cash used – running at $31.3 million, this gives the company a cash runway sufficient for three years’ operations.
On the Smart Score, Prothena shows that a stock doesn’t need positive ratings on all 8 factors to earn a Perfect 10. The stock gets support from a high 12-months momentum, at a positive 68%, as well as $898,500 worth of insider share purchases in the last three months. The hedge funds are also buying in, and their purchases increased by over 268,000 shares last quarter.
This stock has caught the eye of Piper Sandler analyst Yasmeen Rahimi, a 5-star expert on the biotech sector. Rahimi says of this company and its prospects, “At its core, Prothena is fueled by decades’ worth of research around neurological dysfunction due to misfolded proteins to leverage its scientific expertise in developing an extensive pipeline of small molecules, monoclonal antibodies, and vaccines that captures seven indications, such as AL and ATTR amyloidosis, Parkinson’s Disease, Alzheimer’s Disease, and general neurodegeneration... We would buy PRTA ahead of major stock moving catalysts including: Ph1 SAD/MAD data from PRX012 (anti-Aβ) and PRX005 (anti-Tau) in 2023, and prasinezumab's Ph2b data in PD, birtamimab's Ph3 AFFIRM data, and PRX004 Ph2 data in 2024.”
With so many catalysts ahead, it’s no wonder that Rahimi rates this stock as Overweight (a Buy). Her price target is set at $94, implying an upside of 63% on the one-year horizon. (To watch Rahimi’s track record, click here)
Of the 7 recent analyst reviews here, 6 are to Buy against just a single Hold, for a Strong Buy analyst consensus rating. The shares are currently trading for $57.75, and their $86.43 average price target suggests that a gain of 50% lies ahead. (See Prothena stock analysis on TipRanks)
Dyne Therapeutics, Inc. (DYN)
The second stock we’re looking at is an early-stage clinical researcher, Dyne Therapeutics, which is working on treatments for genetically driven diseases. These can be devastating conditions, and effective new therapeutics could become life-transforming game changers. Using its proprietary FORCE platform, Dyne is researching treatments for various forms of muscular dystrophy, including Duchenne and Myotonic, and has two clinical trials at the Phase 1/2 stage. Several additional tracks remain at the discovery and pre-clinical levels.
Dyne is at a fully pre-revenue stage, and the company’s main catalysts are the clinical trials. The first, a study of drug candidate DYNE-101 in the treatment of myotonic dystrophy, is the Phase 1/2 ACHIEVE trial, a multiple ascending dose study, is expected to enroll up to 64 patients. Data on drug safety, tolerability, and splicing are expected for release in 2H23.
Also at the Phase 1/2 stage is the DELIVER trial, a study of safety, tolerability, and dystrophin in the use of DYNE-251 for the treatment of Duchenne muscular dystrophy. This study will enroll up to 46 male patients, both ambulatory and non-ambulatory. Data on the safety, tolerability, and dystrophin level endpoints are, as with the above study, expected in 2H23.
In its last reported quarter, 3Q22, Dyne spent $34.7 million on R&D, and another $7.6 million on G&A activities. The company reported $248.1 million in cash on hand at the end of 3Q, and expects it can fund operations through 2024.
When we look at the Smart Score here, we find a pattern similar to Prothena: not every metric was positive, but the positives outweighed the negatives. Among the positives were financial blogger sentiment, which was 100% positive, and the insider transactions, which were substantial. Company insiders bought up $20 million in DYN over the past three months.
Guggenheim’s 5-star analyst Debjit Chattopadhyay has taken a close look at this stock, and laid out a path toward future successes, writing, “The FORCE platform underpins Dyne’s discovery engine, which to date has generated compelling clinical assets by integrating TfR1-mediated drug delivery. Our proprietary analysis … leads us to believe: (1) ACHIEVE (data 2H23) may demonstrate superior splicing index vs. competition at relatively low doses; and (2) preliminary translational estimations point towards DELIVER (readout in 2H23) generating clinically relevant dystrophin at commercially viable doses. If these clinical updates navigate scrutiny successfully, DYNE will be well-positioned to capture a significant share of the multi-billion-dollar TAM across DM1, DMD, and FSHD.”
Tracking forward from this position, Chattopadhyay gives DYN shares a Buy rating with a $33 price target to suggest a robust one-year upside potential of 136%. (To watch Chattopadhyay’s track record, click here)
There are only 4 recent analyst reviews for Dyne, but they are all positive, making for a Strong Buy consensus rating. With a $14 share price and a $25.5 average price target, DYN boasts an 84% potential upside for the coming year. (See DYN stock analysis on TipRanks)
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Disclaimer: The opinions expressed in this article are solely those of the featured analysts. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.