For more risk-tolerant investors, biotechs are screaming buys. This space is consistently on the Street’s radar as a single catalyst such as a positive FDA outcome or promising trial results can send shares through the roof. For example, last week ChemoCentryx (CCXI) saw its share prices skyrocket 100% in just one day, after the FDA approved its blood vessel inflammation drug Tavneos.
However, the reverse also holds true meaning that biotech stocks carry their fair share of risk. So how are investors supposed to pick the biotech names most poised to outperform the market? We suggest looking to Wall Street analysts.
While the consensus on a given stock can be resoundingly mixed, when all of the analysts covering the stock are onboard it’s a signal that can’t be ignored. With this in mind, we used the TipRanks database to narrow down 2 biotechs that have garnered exclusively bullish calls over the last three months. In fact, the Wall Street view sees them doubling – or gaining even more – in the next 12 months.
The first stock we'll look at is Celcuity, a biotech researcher with a dual track research program. The company, which is studying new treatments for cancer, is pursuing two research tracks. The first is a new drug candidate, gedatolisib, a first-in-class pan-PI3K and mTOR inhibitor that has shown efficacy in the treatment of breast cancer. The second research track is the CELsignia platform, a proprietary technology that uses a patient’s cancer tumor cells to identify the pathway signally that drives individual’s disease – and permits a more precise diagnosis, for a better directed treatment with the optimal medication.
On the gedatolisib front, Celcuity is preparing to initiate a Phase 3 clinical trial, evaluating the drug candidate as a treatment for ER+/HER2-negative metastatic breast cancer. The trial is scheduled to begin in 1H22, shortly after publication of early results from prior clinical trials. In a 17-patient Phase 1 study earlier this year, the drug was found to be both safe and tolerable. The CELsignia platform is the subject of a series of ongoing trials, which evaluate its efficacy in targeting therapies for breast cancer patients.
Among the fans is Canaccord analyst Arlinda Lee, who rates CELC a Buy along with a $50 price target. If correct, the analyst’s objective could deliver one-year returns of 176%. (To watch Lee’s track record, click here)
“Over the next 12-24 months, we expect several catalysts to drive Celcuity shares higher. For lead candidate gedatolisib, we expect clinical data presentation at a medical conference in 4Q... With >450 patients already dosed and encouraging efficacy/safety in a 138-patient Ph1b study, we are optimistic the pivotal trial starting next year can affirm gedatolisib efficacy/safety and support regulatory approval," the analyst added.
Like Lee, the rest of the Street is bullish on CELC. Based on the 4 Buy recommendations assigned in the last three months and 177% upside potential, it’s clear this ‘Strong Buy’ biotech has a lot to brag about. (See CELC stock analysis on TipRanks)
aTyr Pharma (LIFE)
For the second stock, we’ll switch to the inflammatory disease segment. aTyr Pharma is examining the ‘extracellular functionality and signaling pathways of tRNA synthetases.’ The company is following these pathways to develop novel therapeutics for a variety of cancers and inflammatory conditions. The company’s lead drug candidate, ATYR1923, is potentially a first-in-class therapeutic agent, and is currently undergoing four clinical trials. Other drug candidates are in preclinical phases of research.
ATYR1923 is a Neuropilin-2 (NRP2) agonist, that works through receptor proteins expressed by the NRP2 gene. These pathways impact the development of cardiovascular disease, and are implicated in an inflammatory lung disease, pulmonary sarcoidosis. Pulmonary sarcoidosis has a high unmet medical need.
In September, aTyr released data on its Phase 1b/2a study of ATYR1923 in the treatment of pulmonary sarcoidosis. The chief endpoint was met, showing that the drug candidate was safe and well tolerated, and in other endpoints, patients showed clinically meaningful improvements in relief of symptoms.
The company is also evaluating ATYR1923 as a treatment for COVID-19, in response to the ongoing pandemic. COVID causes lung inflammation as one symptom; ATYR1923 was tested in a Phase 2 randomized, double-blind, placebo-controlled study with 32 hospitalized patients. Top line data showed positive results.
This company’s multiple pathways with ATYR1923 caught the attention of RBC’s 5-star analyst Kennen MacKay, who writes: “We see recent data from ATYR1923’s ph2 pulmonary sarcoidosis (PS) trial providing proof-of-concept toward both the agent and aTyr’s unique research platform focused on tRNA synthetase signaling and NRP-2 biology in inflammation and cancer. We consider ATYR1923 an underappreciated asset with potential to achieve blockbuster status in PS (we model risk-adjusted 2040 global sales of $1.2Bn) and upside from expansion potential into other interstitial lung diseases (ILDs).”
In line with these comments, MacKay rates LIFE shares an Outperform (i.e. Buy), with a $22 price target. This figure suggests room for ~139% upside for the coming year. (To watch MacKay’s track record, click here)
As only Buy ratings have been issued in the last three months, it’s no question that this biotech is a ‘Strong Buy.' Not to mention its $20 average price target puts the upside potential at 117%. (See LIFE stock analysis on TipRanks)
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Disclaimer: The opinions expressed in this article are solely those of the featured analysts. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.