Thanks to the $11.4 billion buyout of Array Biopharma (ARRY) by Pfizer (PFE) yesterday, the biotech sector had one of its best days in the second quarter. The SPDR Biotech ET (XBI) was up nearly five percent on the day as buyout speculation - and short covering - boosted this part of the market significantly on the day.
Today, we start the much watched two day Fed meeting. Investors will be watching for clues that a interest rate cut is likely over the next few months.
We will see if the rally can continue today, or whether some profit taking hits the sector. In the meantime, here are four biotech stocks garnering some positive analyst commentary this Tuesday.
Stealth BioTherapeutics (MITO) which came public a few months ago is reissued as a Buy with a $30 price target at H.C. Wainwright with the following valuation commentary this morning.
Our valuation of Stealth BioTherapeutics Corp. is based on a discounted cash flow (NYSE:DCF)-based assessment. This ascribes a 60% probability of approval to elamipretide in 45% likelihood of approval Barth syndrome, a 35% likelihood of approval in 20% likelihood of approval in dry AMD. We utilize a 15% discount rate to all future cash flows and employ a 0.5% terminal growth rate. This yields a $1.25B market value of the firm, which corresponds to a price objective of $2.50 per ordinary share assuming 501M common shares outstanding at the end of 2Q20.”
Piper Jaffray initiates Viewray (VRAY) as a new Overweight with $15 price target. Piper's analyst states 'The company's technology to redefine the radiation treatment of various types of cancer will yield "considerable share taking" in this $5B annual category and views ViewRay's MRIdian technology as "highly differentiated."
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Next up is Voyager Therapeutics (VYGR). Wedbush maintains its Buy rating but raises its price target from $27 to $36. The analyst firm is now ' incorporating Huntington's disease gene therapy candidate VY-HTT01 into their valuation, assigning it a preliminary program valuation of about $9.5/share'
Monday, Chardan Capital reissued its Hold and $30 price target on Voyager, while Cowen & Co. reiterated its Buy rating.
Finally, Ladenburg Thalmann maintains its Buy rating and $10 price target on Eiger Biopharmaceuticals (EIGR) with the following commentary.
We are encouraged to see that the agency has recognized the unmet need of post-bariatric surgery patients that develop PBH, which is a chronic condition characterized by dangerously low postprandial blood glucose levels. By 2022, we estimate ~70,000 annual Roux-en-Y gastric bypass (RYGB) surgeries will be performed in the U.S. (stomach is cut to form a small pouch; connected directly to small intestine’s ileum), with ~25,000 developing PBH. We are modeling peak revenues of $200-250M in the U.S. and Europe, each. We continue to look for Eiger to secure a European partner after pivotal results and/or after EMA approval. The BTD status is timely, as Eiger management is to meet with the agency this summer for its End-of-Phase 2 meeting where it will discuss the pivotal study design, the dosing, duration, cohort size and other design details.'
And those are four small cap concerns getting analyst 'shout outs' today
Thank You & Happy Hunting,
Bret Jensen
Founder, The Biotech Forum | Busted IPO Forum | Insiders Forum
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