September is typically an ugly month for stocks. According to CNBC, on a 100-year basis, September is the only month that has a losing record. So take a break from market dynamics with these exciting biotech options. Biotech stocks march to a different tune. They can spike massively on positive news — be it key trial results or regulatory approvals. Of course, the opposite is also true and stocks can crash just as quickly on unexpected disappointments (delays, failed trials, regulatory rejection). With that in mind, we used TipRanks to ensure two crucial points: 1) big support from the Street (in fact, all these stocks have received only buy ratings in the last three months) and 2) eye-watering upside potential ahead. Now let’s see how the following hot stocks tick these two boxes:
Sorrento Therapeutics, Inc (NASDAQ:SRNE)
Sorrento is a clinical-stage biopharma developing new therapies to turn malignant cancers into manageable and possibly curable diseases. This includes everything from antibodies to pain management- including non-opioid pain medication ZTlido.
This medicated lidocaine plaster received FDA approval earlier this year and is now gearing up for launch. Top HC Wainwright analyst Ram Selvaraju (Profile & Recommendations) believes ZTlido “possesses best-in-class properties within the topical lidocaine niche.” He has a $40 price target on the stock- indicating massive upside potential of 647%!
The best part is that ZTlido uses far less lidocaine than in Lidoderm while efficacy is maintained due to improved adhesion and delivery. Overall, this ‘Strong Buy’ stock has a $21.67 average analyst price target (305%).
Tocagen Inc (NASDAQ:TOCA)
This cutting-edge biotech stock is at the forefront of cancer therapy. Tocagen is developing an RRV platform that can selectively deliver therapeutic genes into the DNA of cancer cells.
Now top Chardan Capital analyst Gbola Amusa (Profile & Recommendations) is out with a new bullish note. “We initiate coverage on Tocagen with a Buy rating (PT$30), on the risk-reward proposition on its pivotal, phase III, BTD/PRIME-designated therapy, Toca 511 & Toca FC, for high-grade gliomas (HGGs)” he wrote on August 30.
With shares just at $12, this suggests upside potential of 150%. Amusa- a five-star analyst- points out that initial results have produced impressive, and in some cases, durable results in rHGG patients, which otherwise typically see fatality in 8-11 months.
Galmed Pharmaceuticals Ltd (NASDAQ:GLMD)
Galmed Pharma has just released one-year biopsy results for NASH (non-alcoholic steatohepatitis, a type of fatty liver disease) for its lead drug Aramchol. NASH represents a huge untapped pharma market, with up to 18 million NASH-sufferers in the US today.
“We believe Aramchol’s result for NASH resolution without worsening of fibrosis to be unequivocally positive” gushes top HC Wainwright analyst Ed Arce (Profile & Recommendations). This is on top of “excellent” safety and tolerability results. He sees shares surging by 171% to hit $36.
As we can see below, this falls exactly in line with the average analyst price target. In the last three months, 5 analysts have published back-to-back Buy ratings on GLMD.
ObsEva (NASDAQ:OBSV)
ObsEva is developing best-in-class drug candidates to improve women’s reproductive health. The lead is Linzagolix (OBE2109), a potentially best-in-class orally-dosed GnRH antagonist to treat symptoms of endometriosis (Ph2b) and uterine fibroids (Ph3).
“In our view, one of the key advantages for linzagolix is the potential to be administered in certain patients without needing to use add-back therapy (ABT)” cheers HC Wainwright’s Ram Selvaraju (Profile & Recommendations). This is a hormone replacement therapy (HRT) that is usually needed to alleviate undesirable effects of the GnRH agonists.
He sees prices spiking 200% from current levels- however even the average analyst price target of $32.17 indicates over 120% upside ahead.
Spring Bank Pharmaceuticals Inc (NASDAQ:SBPH)
Budding biotech Spring Bank Pharma is developing treatments using its small molecule nucleic acid hybrid (SMNH) technology. The firm’s lead asset is inarigivir for the treatment of chronic hepatitis B virus (HBV) infection.
“We believe a functional cure of HBV should constitute a meaningful opportunity in a significant infectious disease market” comments five-star B. Riley FBR analyst Madhu Kumar (Profile & Recommendations). Critically, chronic HBV infection is a primary driver of cirrhosis of the liver, liver failure, and liver cancer worldwide, with an estimated 750,000 annual deaths attributable to the disease.
But right now, approved drugs in HBV achieve at best modest rates of functional cure. Most encouragingly, inarigivir preclinical and early clinical data suggest potential disruption of HBV therapy says Kumar. His $30 price target works out at 140% upside potential.
Kumar is one of five analysts coming out in support of the stock. This is with an average analyst price target of $31 (159%).
Pinpoint Analysts’ Favorite ‘Strong Buy’ Stocks
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