Once again, the analysts at Piper Jaffray are conducting extensive management meetings with the companies they cover. Investors looking for top names to buy now may be at the right place at the right time. Despite the sizable market sell-off, the fundamentals for some of these top names to buy have not changed. What happens with emerging market currency swings is a non-event for these stocks.
In a new research report, the Piper Jaffray team concedes that no dramatic changes are in store for the outlook for the emerging Neuro- and OncoInnovator companies in their coverage. They did review some of the upcoming catalysts (some should be very near term and meaningful for shares) and offered a bit of a first half of 2014 outlook for a few selected names.
Here are the seven top biopharma stocks to buy now at Piper Jaffray.
Avanir Pharmaceutical Inc. (NASDAQ: AVNR) is a name with real upside to buy at Piper Jaffray. Shares of the company rose last week after the company said sales of its drug Nuedexta were strong in the fiscal first quarter. Avanir said it expects to report between $23.3 million and $23.9 million in net sales of Nuedexta. According to FactSet, analysts expected $22.7 million on average. The analyst also think the company will prevail in its current litigation involving the drug. The Piper Jaffray price target is $13. The Thomson/First Call estimate is $8.19. Avanir closed Friday at $3.44. A move to the target would be more than a 300% gain.
BioDelivery Sciences International Inc.‘s (NASDAQ: BDSI) announcement of positive data for BEMA buprenorphine in opioid-naïve patients met the analysts expectations, and the company expects further positive data for the pivotal study in opioid experienced patients around mid-year. According to the company press release, the phase III trial met its primary endpoint of a reduction in the daily average pain numerical rating scale scores from baseline in a study involving chronic back pain. There is also an ongoing second phase III trial that could have results as early as the second half of 2014. The positive results also triggered a $10 million milestone payment from Endo, according to BioDelivery CEO Mark Sirgo. The Piper Jaffray target is currently $10 and may be headed higher. The consensus target is $10.21. The stock closed Friday at $9.41.
Conatus Pharmaceuticals Inc. (NASDAQ: CNAT) should soon have near-term data for its phase II trial for emricasan in acute-on-chronic liver failure, though the Piper Jaffray team believe the stock has been more active as late on read-through from Intercept and its NASH results. They also believe that the drug has a shot at becoming a platform in a product for treating serious conditions of the liver. The Piper Jaffray price target is posted at $16, and the consensus is at $15.75. Conatus closed Friday at $11.28.
Geron Corp. (NASDAQ: GERN) is another name that could make a huge move for shareholders. With the company’s lead hematological malignancy drug imetelstat showing stunning results in a mid-stage trial last year, analysts are keenly awaiting further developments. The problem is that imetelstat will not reach blockbuster status if approved for myelofibrosis alone. The goal would be to get imetelstat approved for a broad range of hematological diseases, which is Geron’s ultimate goal. Piper Jaffray has a $10 target, and the consensus stands at $9.67. The stock closed Friday at $5.71. A move to the target would represent a gain of 75% for investors.
Halozyme Therapeutics Inc. (NASDAQ: HALO) has several potentially very near-term catalysts: EU approval of SC MabThera, data from the phase II study of Hylenex in 400 insulin-pump patients, and phase II data in cellulite. Also important will be FDA input on the path to a label update for Hylenex. Both events are expected to be positive, however it also is likely the outlook of most investors and these events may be largely priced in shares. The price target is placed at $16.50, and the consensus number is much lower at $12.36. The stock closed Friday at $16.55.
Neurocrine Biosciences Inc. (NASDAQ: NBIX) catches an Outperform rating at Piper Jaffray. The analysts believe that its drug NBI 98854 will become the standard of care for patients suffering from Tardive dyskinesia, a neurological disorder that may be caused by long-term or high dose use of antipsychotic drugs. Piper Jaffray has put a $22 price target on the stock, and the consensus number is at $20. Neurocrine closed Friday at $18.10.
Orexigen Therapeutics Inc. (NASDAQ: OREX) is expected to have its obesity drug Contrave approved around June 2014 and to be on the market sometime in the third quarter of 2014. Contrave, in addition to its unique clinical profile targeting both overeating and depression, is the only one of the three obesity drugs that can be sampled, since it is not a scheduled drug. Based on market research conducted by the company, the use of anti-obesity medications in the diabetic and pre-diabetic populations is expected to increase by four times over the next five years. The Piper Jaffray price target for the stock is a staggering $16, and the consensus is at $11.11. The stock closed Friday at $6.78. A move to the target would be a 135% gain for shareholders.
We have noted many times that investing in small cap biopharmaceutical companies is only for very risk-tolerant accounts. The risk of an adverse trial result or an FDA denial can often stall or even end a company’s viability. With that in mind, the Piper Jaffray names at least have some positive tailwinds, as well as upcoming binary events that could trigger huge moves higher.