We are now approaching the second half of 2019. And it may well be time for a little portfolio rebalancing. If you are a fan of biotech stocks, then I would recommend taking a closer look at the stocks below. These 5 ‘Strong Buy’ biotech stocks all boast significant Street support. Plus these analysts are confident that juicy upside potential lies ahead. You have to be careful with biotechs. Big rewards can quickly turn to severe losses if trial data disappoints.
This also means that biotech stocks operate independently of the broader market. Catalysts are more stock-specific, and it pays to be prepared. So that’s why I find it helpful to turn to the Street when it comes to deciding which biotechs make promising investing opportunities for 2H19. Let’s take a closer look at which top biotech stocks make the cut now:
Global Blood Therapeutics (GBT)
Global Blood Therapeutics Inc (NASDAQ:GBT) develops innovative treatments for rare blood diseases. After a meteoric share rise in 2017, GBT has continued to outperform. Most recently GBT revealed impressive results for voxelotor (GBT440). This is an oral, once-daily breakthrough treatment for sickle cell disease (SCD).
“Voxelotor improved clinical measures of hemolysis and demonstrated a favorable safety profile” commented Wedbush analyst Liana Moussatos. She reiterated her GBT Buy rating with a $107 price target (97% upside potential).
However shares pulled back 6% following the event. Moussatos believes the weakness is “unwarranted, overdone, and should be used as a buying opportunity.” She is predicting a 2020 US launch, and $1 billion in gross worldwide sales by 2023. That rises to peak sales of $5 billion in 2027.
A similar message comes from William Blair’s Raju Prasad: “we believe that today’s sell-off is unwarranted given the totality of the data that points to a likely approval for voxelotor in 2020… given the effects across all subgroups in the study, the addressable market for the drug gives us confidence in its blockbuster potential.”
But don’t wait too long. The company has guided to a NDA [new drug application] submission for voxelotor in sickle cell disease under accelerated approval in 2H19. This could send shares soaring.
Out of 9 analysts covering the stock, 8 rate GBT a Buy. Meanwhile the $96 average analyst price target indicates upside potential of over 75%. Interested in Global Blood stock? Get the free GBT Stock Research Report.
Krystal Biotech (KRYS)
Krystal Biotech Inc (NASDAQ:KRYS) is a gene-therapy company specializing in skin diseases. That includes DEB, an incurable, often fatal skin blistering condition caused by gene mutations, and ARCI a severe skin disorder that causes skin to scale. And from an investing perspective this is a top stock to buy now. All six analysts covering the stock rate KRYS a Buy. So no hold or sell ratings here. Plus the $44 price target indicates upside potential of 55%.
Five-star Chardan Capital analyst Gbola Amusa highlights KRYS as a ‘Chardan Top Pick for 2019.’ In a report on June 14 he reiterated his Buy rating with a Street-high $57 price target. That suggests shares can double from current levels! He notes that the European Medicines Agency (EMA) has now granted PRIME Designation to KB103 for the treatment of DEB.
“We continue to view PRIME designation (and corresponding RMAT/BTD in the US) as leading indicators we track closely for alpha generation in the gene therapy space” cheered the analyst. What’s more Krystal’s platform also has the potential to produce a topical gene-therapy for chronic wounds, which Amusa views as a potential blockbuster opportunity.
Bottom line: “We would not be surprised if Krystal’s market cap crosses $1 billion by 2020E and now add that we would not be surprised if the company’s market cap crosses $1 billion in 2019E.” Get the KRYS Stock Research Report.
Iovance Biotherapeutics (IOVA)
Iovance Biotherapeutics Inc (NASDAQ:IOVA) is working to cure cancer, via the patient’s own immune system. It is developing novel cancer immunotherapies based on tumor infiltrating lymphocytes (TIL). The goal: to fight solid tumors across many types of cancer. This includes metastatic melanoma, carcinoma of the head and neck and cervical cancer.
Now’s the time to climb on board a rising stock. Shares have exploded 148% year-to-date — but there’s still plenty of growth ahead. Indeed IOVA has received 9 recent buy ratings from the Street, hence its ‘Strong Buy’ consensus.
“We believe Iovance’s potential for meaningful market share within ACT-based [Adoptive cellular therapy] therapies in cancer is now starting to take shape in the solid tumor setting” enthuses HC Wainwright’s Joseph Pantginis. Following ASCO 2019, the analyst commented: “Iovance’s TIL products, LN-144 and LN-145, are continuing to deliver significant clinical promise in these two indications, and we believe investors are starting to recognize and reward it.”
“If we look at our broader thesis, we continue to view Iovance as a viable takeout candidate by Big Pharma” the analyst adds.
Looking ahead, there are a few catalysts coming up before YE19. These include discussions with the FDA on a registration path in cervical cancer (for LN-145). According to Pantginis, this could boost investor confidence on the future development of LN-145 and the clinical success of its trials. Get the IOVA Stock Research Report.
BioMarin Pharmaceutical (BMRN)
BioMarin Pharmaceutical Inc. (NASDAQ:BMRN) is seeking to develop treatments for rare diseases. The company already has seven products on the market, and a robust pipeline of clinical and pre-clinical candidates in development.
Most recently, the company announced positive 3-year clinical data from the ongoing Phase 1/2 study of Valrox gene therapy for Hemophilia A and positive initial Phase 3 data. However what stands out about BioMarin is its share price. And that the stock continues to look significantly undervalued.
JP Morgan’s Cory Kasimov has just held a call with management, and he addresses this point here. “Perhaps not surprisingly given that BMRN’s share price has been relatively range bound for the past 3 years, management does not believe they are getting enough credit for these opportunities and that competitive risks are overblown,” says the analyst.
“We tend to agree (especially with the former point) and have argued that BMRN is undervalued at these levels,” concludes Kasimov. Indeed, BMRN remains a high conviction long-term idea for the firm, thanks to its orphan-disease focused, diversified base business (>$1B in sales), growing commercial portfolio, and potentially disruptive late-stage pipeline.
This is a point echoed by the Street. “While valrox’s launch trajectory remains uncertain, there is little question that Hem A is a large market” comments Cowen & Co’s Phil Nadeau. So even modest uptake with a price point around $2MM would represent significant revenue explains the analyst. He continues to view BMRN shares as undervalued.
In total, 15 out of 16 analysts polled recently rate BMRN a ‘Buy.’ Their average price target of $125 translates into 48% upside potential. Get the BMRN Stock Research Report.
Dicerna Pharmaceuticals (DRNA)
Last but by no means least comes Dicerna Pharmaceuticals Inc (NASDAQ:DRNA). Shares have surged 48% year-to-date, and a further 40% upside lies ahead (say analysts). Dicerna delivers RNAi-based breakthrough therapies to improve lives. Essentially this involves turning off destructive disease processes by silencing underlying genes.
“We believe that Dicerna has the potential to become a significant competitor in the emerging field of RNAi) The field of RNA medicines is attractive due to its promise to address significant unmet medical needs in rare, liver, cardiometabolic, and respiratory diseases” explains Chardan Capital’s Keay Nakae.
Future updates for Dicerna’s pipeline programs should push shares higher over the next 12 months. Most notably, the first HBV (hepatitis B virus) patient data in 4Q19 represents a significant potential catalyst. Last month, Dicerna announced the initiation of dosing in about 18 chronic HBV patients. “Given the best-in-class preclinical RNAi data in two separate validated mouse models of HBV infection, we believe DCR-HBVS is likely to demonstrate a substantial reduction in HbsAg” writes top-rated HC Wainwright analyst Ed Arce.
And Dicerna is making sure it has a strong foundation from the offset. In just the last couple of weeks it has appointed a number of key execs. That includes Rob Ciappenelli as COO and Steven Kates as VP of regulatory affairs. “We regard this expansion of senior management roles as critical to minimizing ongoing regulatory risk, while maximizing patient engagement” says Arce.
“These new appointments help ensure the right capabilities are in place for both the FDA [application] review… and for a well-planned and efficient product launch” the analyst told investors. Get the DRNA Stock Research Report.
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.