Biotech stocks live and die by FDA decisions. Shares can soar or plunge depending on the FDA decision. Even an approval can spark a selloff if it’s not what investors expect.
All four biotech stocks below have a fast-approaching PDUFA date. For the uninitiated, this stands for the Prescription Drug User Fee Act. And the PDUFA date is the deadline by which the FDA must approve or reject new drug applications (NDAs). Bear in mind that the FDA does have the right to extend this date if need be — which can be very bad news for a small-cap biotech running short of funds.
Why does all this matter? Put simply there’s a lot of money at stake. So no doubt buying ahead of PDUFA dates is a risky call. That’s why turning to analyst reports can help. Here we use TipRanks to pinpoint some analyst insights. As you will see these analysts are feeling pretty bullish on these pharmaceutical stocks in the PDUFA run-up.
Let’s take a closer look at some key dates to track now. And for those risk-tolerant investors who decide to take a shot, good luck. Because when you get it right, the returns for biotech stocks can be very lucrative.
Biotech Stocks to Buy: Catalyst Pharma (CPRX)
This is a biopharma developing therapies for rare debilitating neuromuscular and neurological diseases. Right now Catalyst Pharmaceuticals Inc’s (NASDAQ:CPRX) lead candidate is Firdapse for several rare neuromuscular disorders including Lambert-Eaton myasthenic syndrome (LEMS).
The FDA has set the PDUFA date for Firdapse at November 28, 2018. So far the outlook is very optimistic. “Physicians with whom we spoke who treat LEMS and are familiar with Firdapse uniformly expect approval on/around the 11/28 PDUFA date” says Oppenheimer’s Leland Gershell (Track Record & Ratings).
“Key opinion leaders expressed few reservations around Firdapse’s approval prospects based on its Phase 3 efficacy data and safety profile. They also added supportive anecdotes from their personal clinical experience” the analyst said.
Gershell has a $6 price target on the stock (84% upside potential). Gershell believes the drug will generate sales revenue for CPRX by early 2019, and ultimately achieve ~$475M in 2025E sales. Indeed, launch preparations are already well underway with the hiring of new employees.
Five analysts have published recent buy ratings on CPRX. With an average price target of $6.80, the Street is expecting prices to double from current levels. Interested in CPRX stock? Get a free CPRX Stock Research Report.
Biotech Stocks to Buy: AcelRX Pharma (ACRX)
Get in here before November 3, 2018. On this date the FDA will approve or reject AcelRx Pharmaceuticals Inc.’s (NASDAQ:ACRX) tablet Dsuvia for acute pain. Note that Dsuvia has already been rejected once. Last year shares crashed over 50% following a request from the FDA for additional safety information.
Bear in mind, the drug is so powerful it will only be administered to adult patients in a medically supervised setting — and where other treatments are inadequate.
But now ACRX is back for round two. And encouragingly the drug has already received thumbs up from a positive Advisory Committee vote on 12 October 2018. The committee voted 10-3 in favor of the drug’s approval. Although this vote isn’t binding, the FDA does tend to follow the committee’s advice.
“Following [the vote] we expect ACRX’s lead product Dsuvia to gain approval by its PDUFA date of 11/3/2018. If approved we believe Dsuvia peak sales could be in excess of $350MM,” cheers Cantor Fitzgerald’s Louise Chen (Track Record & Ratings).
Meanwhile HC Wainwright’s Ed Arce calls approval “nearly certain.” As a result, this top-performing analyst bumps up his price target from $7 to $8 (120% upside potential).
If priced right the drug could capture a significant market share — with some analysts looking at 2026E peak Dsuvia revenue in excess of $300MM.
The stock boasts 4 recent buy ratings vs just 1 hold rating. This is with an $7.75 average price target, suggesting shares could surge 113%. Get the ACRX Stock Research Report.
Biotech Stocks to Buy: Ocular Therapeutics (OCUL)
Ready for a Christmas present? Ocular Therapeutix, Inc.(NASDAQ:OCUL) has a clear goal: to pioneer a new era of drug delivery in ophthalmology. The big hitter here is Dextenza for the treatment of post-surgery eye pain and inflammation. And if all goes smoothly the FDA could approve Dextenza on or before the December 28, 2018, PDUFA date.
Although the FDA has twice rejected the drug’s first new drug application (NDA), everything is now back on track. Third time’s the charm, cheers Piper Jaffray’s Joseph Catanzaro (Track Record & Ratings). He sees ‘significant upside’ to OCUL shares at its current valuation. Indeed he has just initiated coverage with a Buy rating and $14 price target (142% upside potential).
“After discussions with management we are confident that the issues raised in Dextenza’s CRLs have been sufficiently addressed to warrant an FDA approval before YE18” Catanzaro told investors.
Plus: “We believe that a favorable label and reimbursement environment will drive US Dextenza sales in the post-surgical setting in excess of $250MM by 2025.”
OCUL is currently trading at a bargain price of just $5.78. The company has received six buy ratings in the last three months with a $13.33 average analyst price target. Get the OCUL Stock Research Report.
Biotech Stocks to Buy: TherapeuticsMD (TXMD)
With only a few days to go, all eyes are on TherapeuticsMD, Inc. (NYSE:TXMD). Earlier this year, the FDA set the PDUFA date for TX-001HR as October 28. If approved, TX-001 would be the first FDA-regulated estrogen plus progesterone (E+P) product. The drug is designed to reduce the frequency and severity of hot flashes.
“FDA approval of TX-001, together with the licensure of Imvexxy, would represent a major corporate achievement, as we believe both drugs will become important treatments for gynecologic conditions that afflict large populations of menopausal women” Cantor Fitzgerald’s William Tanner (Track Record & Ratings) wrote on October 14.
And don’t be alarmed. According to Tanner it is “reasonable to believe TX-001 label will carry the estrogen class black box warning.” However this doesn’t faze the analyst given that TX-001 would initially compete against no other FDA-approved E+P preparations.
He has a Street-high price target on TXMD of $27. This suggests upside potential of 412%!
In the last year all the analysts rating the stock fall in the bullish camp. From the current share price, the $20.33 average analyst price indicates a massive 285% return potential. Get the TXMD Stock Research Report.
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.