Jefferies Has 4 Red-Hot Biotech and Pharmaceutical Stocks to Buy Now

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Kite Pharma

This clinical-stage biopharmaceutical company had a hot 2014 initial public offering and the stock has done outstanding since the debut. Kite Pharma Inc. (NASDAQ: KITE) focuses on the development and commercialization of novel cancer immunotherapy products. It is developing a pipeline of engineered autologous cell therapy-based product candidates for the treatment of solid and hematological malignancies.

The company’s lead product candidate is KTE-C19, a chimeric antigen receptors–based therapy that is in Phase 2 clinical trials for the treatment of patients with refractory diffuse large B cell lymphoma, including primary mediastinal B cell lymphoma and transformed follicular lymphoma.

In late February the company disclosed six-month results from the pivotal study of CAR-T therapy in patients with aggressive lymphomas. The data were overwhelmingly impressive, showing only a slight degradation in response rates and no new safety concerns when compared to the previous three months. On top of that, the company showed that about a third of patients treated with KTE-C19 showed a complete response.

Jefferies noted this:

We highlight a National Health Service study that determined a price of $649,000 for CAR-T, which we view as an upper limit for Axi-Cel pricing, and we raise our Axi-Cel price estimate to $300,000, a number that’s largely in line with consensus, though the Street may not be fully aware of the NHS study.

Jefferies raised its price target to $101 and the consensus target is $74.46. The stock closed Friday at $83.98.

Mallinckrodt

This company has been on a mergers and acquisitions binge over the past three years, and it is a top pharmaceutical stock to buy. Mallinckrodt PLC (NYSE: MNK) is a global specialty biopharmaceutical and medical imaging business that develops, manufactures, markets and distributes specialty pharmaceutical products and medical imaging agents. Areas of focus include therapeutic drugs for autoimmune and rare disease specialty areas like neurology, rheumatology, nephrology and pulmonology, as well as neonatal critical care respiratory therapies and analgesics and central nervous system drugs.

The analysts cited in the recent report:

We recently met with management and key takes were that US healthcare policy change will be gradual but the industry views greater price transparency, positively and MSD-LDD Acthar growth is supported by data build out and volume gains. We think the Street underappreciates the company’s pipeline and clinical timelines for StratGraft and Terlipressin remain on track.

Jefferies has a $70 price target, but the consensus target is higher at $74.87. The stock closed Friday at $62.50.

These are four top stocks to buy in a sector that has much more value than many on Wall Street. While there still could be volatility, much of the concerns are already long since baked into stock prices.