Healthcare Business

Large Cap Biotech Stocks to Buy Leading the Comeback Rally

Gilead Sciences Inc. (NASDAQ: GILD) is another top stock that was crushed in the biotech sell-off but posted solid first-quarter earnings and has rallied back. The company has shown excellent efficacy in chronic lymphocytic leukemia and indolent non-Hodgkin’s lymphoma with their top drug idelalisib, which is an oral inhibitor. The company presented very encouraging data at the recent ASCO conference on updated Phase 3 idelalisib+R data and new PFS/duration curves. Idelalisib is under priority review for this indication with a response expected by August 6. The Credit Suisse price target for the stock is $110, and the consensus price target for the stock stands at $100.57. Gilead closed Friday at $82.39.

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Medivation Inc. (NASDAQ: MDVN) has a top prostate cancer drug that would be a valuable acquisition, and it is another top name rated Outperform at Credit Suisse. Xtandi is a highly leverageable, likely blockbuster product in prostate cancer, a very large market segment with potential upside in breast cancer. The company’s partnership with Astellas suggests a natural buyer, but some on Wall Street think that third parties would also be interested in buying this top biotech name. The Credit Suisse price target for the stock is $95, and the consensus target is $93.47. Medivation closed Friday at $75.46.

Pharmacyclics Inc. (NASDAQ: PCYC) operates as a clinical-stage biopharmaceutical company focusing on developing and commercializing small molecule drugs for cancer treatment. The company’s drug Imbruvica, introduced this year for chronic lymphocytic leukemia, helped patients live longer without their disease worsening than other competing therapies. Wall Street analysts are expecting this month data on the company’s Phase 3 Resonate data and investor interpretation of efficacy and PFS and duration/persistence on therapy. The Credit Suisse price target for the stock is posted at $121, and the consensus price target is much higher at $149.13. The stocks closed Friday at $93.50.

Regeneron Pharmaceuticals Inc. (NASDAQ: REGN) has been a performance monster over the past two years, and most Wall Street firms expect it to stay one. With treatments for everything from macular degeneration to colorectal cancer, the company continues to exploit an extraordinary pipeline. The company is viewed by many Wall Street firms as a leading candidate to be one the next generation biotech large cap leaders. The Credit Suisse price target for the stock is $340, and the consensus price target is posted at $345.83. Regeneron closed Friday at $311.21.

The halcyon days of 2012 and 2013, when everything went right for biotech investors, may be gone for quite a while. However, buying the top names, with incredible products and pipelines, still makes good sense for investors with a higher risk tolerance. Buying these large cap leaders may provide the best upside with the least downside risk.

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