Top Biotech Picks Highlight Jefferies Growth Stocks to Buy

Health and Healthcare

Published: April 12, 2016 8:25 am

Last Updated: January 13, 2020 10:53 am

The flurry of earnings starts this week, and depending on who you listen to, the numbers are either going to be fine or they will be disappointing. One thing is for sure, biotech, which is down big this year, with the iShares Nasdaq Biotech Index (IBB) still down almost 20%, looks to be fighting its way back, and many of the top companies in the sector will be reporting in April.

A new Jefferies research report highlights their top growth picks for this week, and the list is dominated by top biotech stocks. While only suitable for very aggressive accounts, they could have some tremendous upside, especially if binary event catalysts play out. All are rated Buy at Jefferies.

Anacor Pharmaceuticals

This company has been hit hard as upheavals in the specialty pharmaceutical area have proved damaging to all. Anacor Pharmaceuticals Inc. (NASDAQ: ANAC) is a biopharmaceutical company focused on discovering, developing and commercializing novel small-molecule therapeutics derived from its boron chemistry platform.

Anacor’s first approved drug, Kerydin (tavaborole) topical solution, 5%, is an oxaborole antifungal approved by the U.S. Food and Drug Administration (FDA) in July 2014 for the topical treatment of onychomycosis of the toenails. In July 2014, Anacor entered into an exclusive agreement with Sandoz, a Novartis company, pursuant to which PharmaDerm, the branded dermatology division of Sandoz, distributes and commercializes Kerydin in the United States.

Jefferies notes that the company reported lower than expected earnings as the Kerydin numbers disappointed, but the firm notes that Crisaborole, an investigational non-steroidal topical PDE-4 inhibitor for the potential treatment of mild-to-moderate atopic dermatitis and psoriasis, is still the big story at the company, and FDA approval is expected in 2017.

When Jefferies analysts attended the AAD conference, they mentioned the buzz for various new AD therapies including Crisaborole. They feel that Crisaborole peak sales will be $1 billion or more. Plus, they note that the fact that it is not a steroid is a positive from a safety concern level.

The Jefferies price target for the stock is $105, and the Thomson/First Call consensus target is $131.25. The stock closed Monday at $65.10, down over 4% on the day.