For investors looking for huge returns, these healthcare stocks to buy may well be the answer. While these stocks are inevitably risky with a lot riding on key clinical results, the results can be spectacular if trials succeed. For example, Madrigal Pharmaceuticals, Inc. (NASDAQ:MDGL) shares are up over 500% in the past six months following stunning Non-alcoholic Steatohepatitis (NASH) data.
But the riskier the stock, the more important it becomes to check all possible data signals. Here we used TipRanks stock screener to pinpoint healthcare stocks with a “Strong Buy” analyst consensus rating. Applying these filters (“Strong Buy,” healthcare sector) led to an extensive list of hot stocks.
You can easily hone in on stocks that stand out from the crowd by looking at the average analyst price target. I scanned for stocks with recent “buy” ratings and upside potential of over 100% for 2018. In fact, all these healthcare stocks to buy ended up also having 100% Street support, as you can see from the screenshots below.
Let’s now dig further into just why these stocks make such intriguing investing opportunities right now:
Healthcare Stocks to Buy: TherapeuticsMD
This unique biotech specializes in women’s health issues. It’s potentially on the cusp of a big breakthrough with its softgel capsule, TX-004HR, for post-menopausal pains. The stock is currently trading slightly lower on the FDA’s announcement that it will take six months rather than two to review TX-004HR. The PDUFA crunch date for approval/ rejection now falls on May 29, 2018.
Crucially, analysts remain bullish on TherapeuticsMD, Inc. (NYSE:TXMD) outlook even after this setback. Noble Financial’s Caroline Palomeque reiterated her buy rating on December 20. She says the ‘stock pullback provides buying opportunity’ and notes that the six-month classification is due to regulatory process rather than clinical issues.
“Following the acceptance of the NDA resubmission for TX-004HR, the stock was down ~5% pre-market, in our view, due to the NDA resubmission being classified as a Class 2. We note that the overall news was positive, as the company was given a PDUDFA date by the FDA. The slight pullback may provide an entry point for investors.”
In the last three months, this ‘Strong Buy’ stock has scored an impressive seven “buy” ratings from the Street. These analysts have an average price target on the stock of $16.33, which indicates huge upside potential of over 165%.
Healthcare Stocks to Buy: Synergy Pharmaceuticals
For investors who like risk, I recommend checking out Synergy Pharmaceuticals, Inc. (NASDAQ:SGYP). This gastrointestinal biopharma is heading for a critical January with multiple catalysts on the horizon. First, the FDA will announce whether Synergy’s key Trulance drug is approved for IBS-C (irritable bowel syndrome with constipation) on Jan. 24. The drug is already on sale for chronic idiopathic constipation (CIC).
So far, Trulance’s clinical trial results for IBS-C are very encouraging. Top Cantor Fitzgerald analyst William Tanner says “In our view, Synergy is likely to experience a significant acceleration in sales growth once it obtains a label extension … We believe it highly likely the FDA approves the indication [for IBS-C].” He has a $10 price target on the stock.
At the same time, SGYP must also demonstrate that it has $128 million in the bank on Jan. 31. The company needs this to receive the second tranche of its debt facility in February. Again, it is likely that SGYP will be able to secure the funds — but the risk is still worth noting.
Overall the stock has 100% Street support in the last three months. Five analysts have published SGYP buy ratings with an $8.60 average price target. Given the stock is trading at just $2.25, this suggests an eyebrow-raising 282% upside potential from the current share price.
Healthcare Stocks to Buy: Global Blood Therapeutics (GBT)
Global Blood Therapeutics, Inc. (NASDAQ:GBT) is one of my favorite stocks right now. And I’m not alone. Top Needham analyst Danielle Brill recently raised her price target on GBT to $70, saying the company is her top pick going into 2018. GBT is currently developing its late-stage product candidate, voxelotor (previously called GBT440), for the treatment of sickle cell disease.
Brill speaks of her “conviction for a positive outcome from Part A of the Phase 3 HOPE trial” in 1H18 after the latest data updates as voxeletor’s safety and efficacy profile remain encouraging. Plus, Cowen & Co analyst Ritu Baral notes that a clinician presenting data ‘passionately underlined the large impact that the drug has had in these terminally-ill patients from a quality of life standpoint.’
With 5 buy ratings in the past three months, this healthcare stock has a firm ‘Strong Buy’ analyst consensus rating on TipRanks. Meanwhile, the $74.74 average analyst price target works out at 100% upside from the current share price. Indeed, with shares slightly off their $45.70 peak at $37.45, now is a good opportunity to buy.
Healthcare Stocks to Buy: Alder Biopharmaceuticals (ALDR)
Good news for migraine sufferers- Alder BioPharmaceuticals, Inc. (NASDAQ:ALDR) is currently developing antibody-based treatments for migraine prevention. Its lead candidate, eptinezumab, has already passed a Phase 3 trial, PROMISE 1, for frequent episodic migraine. Now the drug is in a second Phase 3 trial, PROMISE 2, for chronic migraine with results due in 1H18.
The stock has pulled back 50% over the last year because the benefit compared to placebo was less than hoped. But Canaccord Genuity’s Sumant Kulkarni is still confident that the stock has outsized potential. He tells investors to buy the dip because of three key reasons:
- ALDR’s product is 100% bioavailable and starts acting within a day, while competitors appear to take longer to act. The product is dosed via quarterly infusions versus most competitors that are monthly injections.
- Physicians could be incentivized to administer ALDR’s IV product due to its procedure-based reimbursement.
- The migraine prevention market is worth a whopping $7.5-10 billion per year based on 36 million US migraine sufferers, of which ALDR expects to target about 5 million.
But he warns that big competitors could pose a headache for Alder- although it is still too early to be sure. Overall this ‘Strong Buy’ stock has scored five buy ratings in the previous three months.
These five analysts are projecting (on average) upside potential of 110% from the current share price to $23.
Healthcare Stocks to Buy: TG Therapeutics (TGTX)
If you’re looking for a ‘Strong Buy’ stock with over 200% upside potential, look no further than TG Therapeutics, Inc. (NASDAQ:TGTX). This biopharma is focused on developing novel treatments for B-cell malignancies and autoimmune diseases. Raymond James analyst Reni Benjamin recently attended an investor event with TGTX. He left the event bullish and released a note maintaining his ‘Strong Buy’ rating on the stock.
“The key ttakeawaysfrom the analyst event in our opinion include: 1) Dr. Owen O’Conner’s analysis of the space leads to one conclusion: PI3K delta’s have robust clinical activity and that TGR-1202 represents the best in class when it comes to tolerability. In our opinion, both are important when it comes to combining with other therapeutic modalities approved for CLL (chronic lymphocytic leukemia)” says Benjamin.
TGTX scores an impressive five “buy” ratings in the last three months — and no hold/ or sell ratings. Overall these five analysts anticipate that the stock will hit $25.83 from the current $8.40 share price.
Healthcare Stocks to Buy: Achaogen (AKAO)
This innovative biopharma is working on treating serious multi drug-resistant infections. And Achaogen, Inc. (NASDAQ:AKAO) has just announced that it has a new CEO to lead key drug Plazomicin to fruition.
“We see the management transition as a positive for Achaogen, especially given Mr. Wise’s experience in scaling and leading commercial organizations. As Achaogen prepares for the potential commercialization of Plazomicin, we see this as a move in the best interest of the company” writes top Mizuho analyst Difei Yang.
She says Plazomicin has greater potential than rival drugs and boasts impressive survival benefits.
Achaogen has received only buy ratings in the last year- with five buy ratings in the last three months alone. As the stock is now trading at $11, the average analyst price target of $26.20 works out at 138% upside from the current price.
Indeed, Needham’s Alan Carr wrote in November, “stock is undervalued at current levels. Reiterate buy.”
Healthcare Stocks to Buy: Five Prime Therapeutics (FPRX)
Five Prime Therapeutics, Inc. (NASDAQ:FPRX) is a clinical-stage biotech company discovering and developing novel protein therapeutics. The company is initially focusing on cancer and inflammatory disease. Shares tanked back in November after investors spooked out about before the release of clinical results for pancreatic cancer. However, the results actually revealed better-than-expected response rates.
Five-star Wells Fargo analyst Jim Birchenough reiterated his buy rating on the stock on November 7. He says a 10% response rate in 2nd-line+ pancreatic cancer, with 13% 6-month control rate, represents an impressive result beyond that seen in chemotherapy. The analyst notes that this is in a patient population not responsive to anti-PD1 therapy alone.
Similarly, top Nomura Instinet analyst Christopher Marai says the recent selloff in shares of Five Prime Therapeutics appears unfounded. The data highlights “remarkable durable responses in patients not expected to respond,” Marai tells investors in a research note.
Five Prime is still a ‘Strong Buy’ stock according to the Street, with four recent “buy” ratings. These analysts believe (on average) the stock is capable of spiking over 230% to hit $73 in the next 12 months.
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TipRanks offers investors the latest insight into eight different sectors by tracking the activity of 4,700 analysts, 5,000 financial bloggers and even 37,000 corporate insiders. As of this writing, Harriet Lefton did not hold a position in any of the aforementioned securities.