Health and Healthcare

PropThink Biotech Stocks to Buy with Big Gains: Cubist, Immunomedics and More

The world of biotech investing is always a difficult one. Often a binary event, such as U.S. 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 sectors. Its focus is on identifying and analyzing technically complicated companies and equities that are grossly overvalued or undervalued.

Here are some of the new stocks to buy or consider from PropThink.

Trius Therapeutics Inc. (NASDAQ: TSRX) is a small-cap antibiotic company that has been rumored to be a buyout target. Trius sparked investors interest recently with an announcement of a new patent allowance for a “therapeutic combination of the experimental medicine tedizolid phosphate with a currently available antibiotic daptomycin (daptomycin is the scientific name for Cubicin). A fixed-dose combination of tedizolid and Cubicin could limit the small but growing problem of Cubicin resistance and therefore be good for patients.” The Thomson/First Call estimate for the stock is $12.

Cubist Pharmaceutical Inc. (NASDAQ: CBST) remains a top stock to buy and 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, which is sure to rise, as the stock trades above that level now.

Immunomedics Inc. (NASDAQ: IMMU) is on the radar screen as a possible option trade candidate. Immunomedics is a biopharmaceutical company engaged in the research, development, manufacture and marketing of monoclonal, antibody-based products for the treatment of cancer, autoimmune and other serious diseases in the United States and Europe. Its products include epratuzumab, which is in phase III trials for the treatment of systemic lupus erythematosus in non-Hodgkin lymphoma and acute lymphoblastic leukemia; Yttrium-90-labeled clivatuzumab tetraxetan, a humanized monoclonal antibody for pancreatic cancer that completed phase I/II clinical trials; and Veltuzumab, a phase II clinical study completed product for the treatment of patients with non-Hodgkin’s lymphoma and immune thrombocytopenic purpura. The consensus price target for this promising stock is $6. That target would represent an almost 100% gain from current trading levels.

Synergy Pharmaceuticals Inc. (NASDAQ: SGYP) is an intriguing stock to buy. On Tuesday the company presented positive safety and efficacy results from its large multicenter trial of plecanatide in patients suffering from chronic idiopathic constipation at Digestive Disease Week in Orlando. The consensus price target for the stock is $13. This is another stock that could provide investors a potential return in excess of 100% if the price target is hit.

Cytomedix (CMXI), Athersys Inc. (NASDAQ: ATHX) and Titan Pharmaceuticals Inc. (TTNP) are all stocks that the PropThink team find very interesting. All of the stocks are “penny stocks” and trade under $2 a share. These would be highly speculative in nature, and are only suitable for the most aggressive accounts. These are not suitable for any investors or accounts other than those.

With its 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 names may be totally unsuitable for conservative portfolios. With that caveat in place, some of the names also could lead to spectacular gains.

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