The world of biotech investing is always a difficult one. Often a binary event, such as a Food and Drug Administration (FDA) approval or a life-saving capital raise is the difference between not only success or failure, but survival. Combing through reams of complicated data to find nuggets that point at possible outcomes is what the quality biotech analysts do.
The biotech analysts at PropThink always try to handicap the best and worst scenarios on the stocks they cover. PropThink is an intelligence service that delivers long and short trading ideas to investors in the health care and life sciences industries. Their focus is on identifying and analyzing technically complicated companies and equities that are grossly overvalued or undervalued.
Here are some current stocks the PropThink analysts are covering. Investors should remember that these names can be highly speculative and are not suitable for conservative portfolios.
AVEO Pharmaceuticals Inc. (NASDAQ: AVEO) may be a micro-cap stock to buy. An advisory panel vote went against the company recently, but it may be a bottom-fishing candidate. Aveo is a developmental stage biotech company, with its leading product candidate designed to treat renal cancer. Seth Klarman’s Baupost Group hedge fund owned 4.9 million shares at the beginning of this year. The Thomson/First Call price target is $2.90.
Onyx Pharmaceuticals Inc. (NASDAQ: ONXX) is a company with huge momentum. For its most recent quarter, Onyx delivered a doubling in revenue from the previous year to $145.5 million, with practically all the gains coming from its multiple myeloma drug Kyprolis. The consensus price target for the stock is $106.
Celgene Corp. (NASDAQ: CELG) hit a new 52-week high this week. The company recently reported data from its ongoing phase III trial of apremilast this month, showing the drug successfully reduced psoriatic arthritis symptoms by at least 20% versus placebo. The consensus target is at $140.
Regeneron Pharmaceuticals Inc. (NASDAQ: REGN) is another name that has been on a huge roll. Regeneron is an integrated biopharmaceutical company that focuses on development of new candidates for serious ailments primarily in areas like ophthalmology, inflammation, cancer and hypercholesterolemia. The consensus for the stock is at $288.50.
MAKO Surgical Corp. (NASDAQ: MAKO) is an intriguing stock to the PropThink team, although not yet listed as a stock to buy. MAKO Surgical is a medical device company that markets its advanced robotic arm solution, joint-specific applications for the knee and hip, and orthopedic implants for orthopedic procedures in the United States and internationally. The consensus price target is $12.
ViroPharma Inc. (NASDAQ: VPHM) is expected to deliver growth despite a poor quarter. ViroPharma’s commercial and pipeline progress is on track, with new timelines announced for several clinical programs. With its lead drug Cinryze continuing to show growth and what appears to be growing market share, the company is moving beyond the loss of its Vancocin franchise. The consensus price target for the stock is $33.
Cubist Pharmaceutical Inc. (NASDAQ: CBST) is the ultimate binary event play. With a critical court decision pending, the stock could have tremendous movement, depending on the outcome. Cubists’ primary revenue drug Cubicin (daptomycin), which is an injectable antibiotic with nearly $1 billion in sales, is being challenged by a generic drug manufacturer. Investors need to be very careful here. The consensus price target for the stock is $52.50.
With a penchant for large-cap names with huge momentum and small-cap names on the verge of a big success, PropThink offers a good balance of biotech information and data. Again, investors should remember that some of the highly speculative stocks may be totally unsuitable for conservative portfolios. With that caveat in place, some of the names could also lead to spectacular gains.