Needless to say, the biotech world has had a very difficult 18 months. Even the biggest and the best companies, many of which trade cheaper than big pharmaceutical companies, have suffered as investors have fled for greener pastures. Much of the blame for the poor showing is the very shrill rhetoric from politicians over drug pricing, and while there is always an argument for lower prices, taking down an entire industry is extreme.
Four separate new reports from the analysts at Stifel focus in on companies that not only have data that could prove to be huge, but all four are offering aggressive accounts the best entry points in some time. Some of these stocks are very speculative, and though rated Buy, they are only appropriate for very aggressive portfolios.
This small cap company has third-quarter data that could be huge. Dicerna Pharmaceuticals Inc. (NASDAQ: DRNA) is a ribonucleic acid (RNA) interference-based biopharmaceutical company. The company operates in the segment of discovery, research and development of treatments based on its RNA interference (RNAi) technology platform.
Dicerna is focused on the discovery and development of treatments for rare inherited diseases involving the liver and for cancers that are genetically defined. The company uses its RNAi technology platform to build a pipeline in these therapeutic areas. It develops dacryocystorhinostomy (DCR)-Primary Hyperoxaluria Type 1 (PH1) for the treatment of PH1 by targeting the gene encoding the liver enzyme glycolate oxidase.
The Stifel analysts noted in their report:
With the balance sheet now fortified as a result of the recent convertible preferred financing, management can now execute on a number of IND-enabling studies which should allow for three programs to enter the clinic by year-end 2018. We will be particularly interested in any competitive differentiation management may be able to establish with the DCR-PHXC program – and management suggested there may be some additional clarity on this front provided in conjunction with the upcoming International Workshop on PH1 (July 14-16) where PHYOS natural history data will also be presented. We continue to believe current valuation fails to reflect what we believe to be the intrinsic technology value of a differentiated RNAi drug discovery/development platform.
The Stifel price target for the stock is a whopping $9, while the Wall Street consensus is $5.70. The shares closed most recently at $3.07.
This is a leader in the synthetic biology area. Intrexon Corp. (NYSE: XON) is a life sciences and biotechnology platform company. It licenses an extensive tool kit for manipulating DNA, proteins and cells, which can be used by its collaborators to develop and commercialize new and improved biologically based products for the health care, food, energy, environmental and consumer end markets.
Intrexon and the firm’s partner, Fibrocell, received and FDA Orphan Designation for FCX-007 for the treatment of dystrophic epidermolysis bullosa, which includes recessive dystrophic epidermolysis bullosa (RDEB). In addition, FCX-007 has been granted Rare Pediatric Disease Designation and Fast Track Designation by the FDA for treatment of RDEB. FCX-007 is a gene therapy product candidate for the treatment of RDEB, a congenital and progressive orphan skin disease caused by the deficiency of the protein type VII collagen (COL7). FCX-007 is a genetically modified autologous fibroblast that encodes the gene for COL7.
Stifel notes that the companies received a recommendation from the Data and Safety Monitoring Board to continue Phase 1 and 2 trials with FCX-007 for the treatment of RDEB, following a review of safety data from the first patient treated. No product-related adverse events were reported.
Stifel has a stunning $57 price target, and the posted consensus target is $37.83. The shares closed Tuesday at $19.44.