Forget market dynamics. These biotechs are playing to their own tune. According to the Street’s top analysts this can be a very lucrative path. Biotech stocks can spike massively on positive news — be it key trial results or regulatory approvals. Of course, the opposite is also true and the biotech sector can crash just as quickly on unexpected disappointments.
But the key point remains: Biotechs provide an outlet away from the rest of the market to potentially make serious money. That’s especially welcome in the month of September — a notoriously tricky time for the markets. Indeed, September has been the worst performing month of the year for the Dow Jones Industrial Average and the S&P 500 since 1950.
With that in mind, let’s now turn to these seven strong buy biotechs now. I used TipRanks to ensure two crucial points: 1) big support from the Street, especially from top-performing analysts and 2) eye-watering upside potential ahead. Now let’s see how these stocks tick these two boxes:
Biotech Stocks to Buy: ObsEva (OBSV)
ObsEva (NASDAQ:OBSV) 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).
Top HC Wainwright analyst Ram Selvaraju (Profile & Recommendations) is very bullish on the stock’s potential. He has just reiterated his “buy” rating with a $44 price target. From current levels that indicates massive upside potential of 237%!
He notes that just-released data from AbbVie Inc (NYSE:ABBV) reduces the risk for OBSV’s Linzagolix. “In our view, the long-term efficacy for elagolix should bode well for future development of linzagolix in uterine fibroids, since both drugs are GnRH receptor antagonists and have shown comparable potency in clinical studies.”
However, one of the key advantages for Linzagolix is the potential to be administered in certain patients without needing add-back therapy (ABT). This is the addition of a small amount of the hormones estrogen and/or progesterone to reduce undesirable effects of GnRH.
Overall, six analysts have published back-to-back buy ratings on OBSV stock. This is with a $32 price target (147% upside potential). See what other Top Analysts are saying about OBSV.
Biotech Stocks to Buy: Tocagen Inc (TOCA)
This cutting-edge biotech stock is at the forefront of cancer therapy. Tocagen Inc (NASDAQ:TOCA) is developing an RRV platform that can selectively deliver therapeutic genes into the DNA of cancer cells.
Right now, all eyes are on Toca 511 and Toca FC. These drugs are in pivotal Phase 3 trials for recurrent high-grade gliomas (HGGs), with data due in 1H19. These are extremely difficult to treat cancers.
“Given the robustness of overall datasets so far, we model $877.6 mm in 40% risk-adjusted 2030E sales for Toca 511 & Toca FC in HGGs, which drives our $30 PT and buy rating for TOCA” explains Chardan’s Gbola Amusa (Profile & Recommendations). This translates into 208% upside potential from the current share price of just $9.75.
This five-star analyst sees important differentiators between TOCA’s offerings and previously failed therapies. For example, Toca 511 & Toca FC succeeded in gaining both Breakthrough Therapy Designation (BTD) and PRIME designation. “We believe regulators were motivated by the greater robustness of Tocagen’s data, which has undergone academic scrutiny” writes Amusa.
In total, four analysts have published buy ratings on TOCA stock in the last three months. Their average analyst price target of $19.88 suggests prices can more than double. See what other Top Analysts are saying about TOCA.
Biotech Stocks to Buy: Nightstar Therapeutics (NITE)
Nightstar Therapeutics (NASDAQ:NITE) is revolutionizing the treatment of blinding eye diseases. It’s dealing with rare inherited retinal diseases that would otherwise progress to blindness. Encouragingly, Nightstar is easily ahead of competitors MeiraGTx (NASDAQ:MGTX) and Applied Genetic Tech Corp (NASDAQ:AGTC).
And a crucial date is fast approaching. Nightstar is due to report preliminary data from its X-Linked Retinitis Pigmentosa (XLRP) program on Sept. 22 at the European Society of Retina Specialists (EURETINA) meeting in Austria.
“We believe the data will be an important catalyst for shares” says five-star Mizuho Securities analyst Difei Yang (Profile & Recommendations). She has just reiterated her “buy” rating on the stock with a $24 price target.
Yang continues: “In our view, positive results would further validate the Nightstar platform and would be a significant de-risking event for the XLRP program which we believe is given minimal credit for now. We would be buyers ahead of this binary event.”
The average analyst price target is currently at $33 (52% upside potential). This is from three analysts who have all published recent buy ratings on the stock. See what other Top Analysts are saying about NITE.
Biotech Stocks to Buy: Alnylam Pharmaceuticals (ALNY)
Alnylam Pharmaceuticals, Inc. (NASDAQ:ALNY) is developing novel RNAi-based therapies to treat a wide range of debilitating diseases with high unmet medical need. The involves a cellular mechanism that use the gene’s own DNA sequence of gene to turn it off, known as silencing.
On Aug. 10, ALNY announced FDA approval for lead product candidate ONPATTRO for hATTR Polyneuropathy — a disease caused by the buildup of protein. Onpattro is the first approved drug using an RNAi to treat a disease.
The drug has also now received European approval — way earlier than expected. “We consider this a positive event for ALNY shares, as it initiates the commercial launch of Onpattro in Europe, an important market for hATTR disease” cheers B.Riley FBR’s Madhu Kumar (Profile & Recommendations).
This five-star analyst has a $230 price target on the stock (87% upside potential). And he has a word of advice for investors: “We believe ALNY shares could face volatility during the early phase of the Onpattro launch. As such, we would view any initial weakness as an especially attractive entry point.”
Overall, this strong buy stock has received 10 buy ratings versus just one hold rating and one sell rating. This is in the last three months. These analysts have an average price target of $149. See what other Top Analysts are saying about ALNY.
Biotech Stocks to Buy: Sorrento Therapeutics (SRNE)
Sorrento Therapeutics, Inc (NASDAQ:SRNE) 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.
For top HC Wainwright analyst Ram Selvaraju (Profile & Recommendations) this stock could climb all the way to $40. Considering that the current share price is just $5.55, we are looking at mind-blowing upside potential of 620%. This values SRNE at $6.4 billion based on a sum-of-the-parts approach, and assuming 159 million shares outstanding as of end 2Q 2019.
So what’s driving this extremely bullish sentiment? A key element is the company’s plethora of immuno-oncology technology platforms. According to Selvaraju “any one of these could be the basis of a transformative or validating strategic transaction.”
He notes a very lucrative recent transaction between Affimed NV and Genentech, Inc. as setting a strong precedent. Currently, however, the market does not appear to be valuing Sorrento’s various platforms in this regard, says this top analyst.
In total, three analysts have published buy ratings on the stock in the last three months. This is with a slightly more conservative average price target of $22 — although 290% upside doesn’t sound too bad! See what other Top Analysts are saying about SRNE.
Biotech Stocks to Buy: Galmed Pharmaceuticals (GLMD)
Galmed Pharmaceuticals Ltd (NASDAQ:GLMD) has exploded by 80% in just the last three months. The catalyst: the release of much-anticipated one-year biopsy results for NASH (non-alcoholic steatohepatitis, a type of fatty liver disease) for its lead drug Aramchol. Bear in mind, NASH represents a huge untapped pharma market, which affects up to 18 million Americans 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 came with “excellent” safety and tolerability results. He sees shares climbing by a further 166% to hit $36.
Plus the drug now has a strong foundation for the critical Phase 3 trials. Following a call with management, Arce notes that the Phase 3 trial should start end of 1Q19 or early 2Q19 at a cost of around $75 million.
No less than seven analysts have published recent buy ratings on the stock. These analysts have an average price target on Galmed of $36.60 (169% upside). See what other Top Analysts are saying about GLMD.
Biotech Stocks to Buy: Spring Bank Pharmaceuticals (SBPH)
Last but not least we have budding biotech Spring Bank Pharmaceuticals Inc (NASDAQ:SBPH). The company, founded in 2002, is developing treatments using its small molecule nucleic acid hybrid (SMNH) technology.
Alongside collaborator Gilead Sciences, Inc. (NASDAQ:GILD), SBPH is working on the lead asset, inarigivir, for chronic hepatitis B (HBV). Following on the success of curative hepatitis C (HCV) therapies, HBV cures would present an exciting global market opportunity.
“With 270 mm chronic HBV patients worldwide and 17 mm in the US and Europe, chronic HBV represents a substantial unmet medical need” comments top Chardan Capital analyst Gbola Amusa (Profile & Recommendations). Indeed, his $45 price target indicates an incredible 228% upside potential from current levels.
Luckily the drug continues to demonstrate impressive efficacy. Based on impressive data, SBPH has now fast-tracked inarigivir into phase 2b/3 trials. “To us, this acceleration of the clinical program and the increased involvement of Gilead in the development of inarigivir is a strong positive for this approach focusing on immunomodulation” says Amusa.
In total, the stock has received five recent buy ratings. This is with a $31 price target (126% upside potential). See what other Top Analysts are saying about SBPH.
TipRanks.com offers exclusive insights for investors by focusing on the moves of experts: Analysts, Insiders, Bloggers, Hedge Fund Managers and more. See what the experts are saying about your stocks now at TipRanks.com. As of this writing, Harriet Lefton did not hold a position in any of the aforementioned securities.