Needless to say, the biotech world has had a very difficult year. Even the biggest and the best companies, many of which trade cheaper than big pharmaceutical companies, have suffered as investors have fled the sector. Much of the blame for the poor showing is the very shrill election-year rhetoric from politicians over drug pricing, and while there is always an argument for lower prices, taking down an entire sector is extreme.
In three separate new reports, the analysts at Stifel focus in on companies that not only have data that could prove to be huge, but that have stocks that have been absolutely hammered over the past year, offering aggressive accounts the best entry points in some time. These stocks are very speculative, and though rated Buy, they are only appropriate for very aggressive portfolios.
This stock has had a nice run off the February lows and the Stifel team sees more upside ahead. Array BioPharma Inc. (NASDAQ: ARRY) is biopharmaceutical company focused on the discovery, development and commercialization of small molecule drugs to treat patients with cancer in North America, Europe and the Asia-Pacific. The company currently has six registration studies that are advancing related to three cancer drugs. These programs include binimetinib (MEK162), encorafenib (LGX818) and selumetinib.
The analysts like the company’s upcoming catalysts for the rest of calendar 2016, and they note this in their recent report:
We continue to like the implied risk/reward ahead of pivotal P3 COLUMBUS data later this quarter – and believe the company, despite being third-to-market with a MEK/BRAF inhibitor combo, still has an opportunity to differentiate binimetinib/encorafenib on the basis of safety/tolerability. We remain cautiously optimistic on the regulatory path forward in NRAS melanoma with now-filed NEMO data given the enhanced PFS benefit in patients receiving prior immunotherapy –which appears to be the most clinically-relevant patient population given the current treatment paradigm. The initiation of a P1/2 dose-escalation study evaluating ARRY-382 (a CSF-1R inhibitor) with pembrolizumab generates another longer-term call option on the development front – but note liver safety could represent an initial hurdle.
Stifel lifted its price target for the stock to $8 from $7, and the Wall Street consensus target is actually higher at $8.43. The stock closed most recently at $4.45 per share.