Healthcare Business

3 Biotech Stocks to Buy With Huge Catalysts Coming Soon


Another top pick at SunTrust, Cempra Inc. (NASDAQ: CEMP) is a clinical-stage pharmaceutical company focused on developing antibiotics to meet critical medical needs in the treatment of bacterial infectious diseases. Many analysts feel that Cempra is a very positive story as many of the other players have left the antibiotic market. Solithromycin is the company’s potent fourth-generation macrolide antibiotic. The oral data in Phase 3 was out in January and was very positive. Its polymorph patent extends to 2032, which is significant. With other drugs also well along in clinicals, the company may be a target for a bigger biotech.

The SunTrust team points out in the report that Solithromycin Phase 3 SOLITAIRE-IV data is due by December. Not only could that be huge, but positive data could get a quick FDA approval as there is such a desperate need. Again, it also could get big pharmaceutical companies thinking about a bid for the company.

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Cowen has the stock rated Buy and a price target of $58. The consensus target is lower at $49.80. The shares closed on Friday at $41.86.

Tetraphase Pharmaceuticals

This clinical stage biopharmaceutical company is developing novel antibiotics to treat life-threatening multidrug-resistant infections. Tetraphase Pharmaceuticals Inc. (NASDAQ: TTPH) announced last year that it had completed patient enrollment in the lead-in portion of its IGNITE-2 clinical trial. This two-part Phase 3 clinical trial is studying the safety and efficacy of intravenous and oral formulations of eravacycline for the treatment of complicated urinary tract infections. The lead-in portion of this trial was designed to inform the selection of an oral dose to take forward into the pivotal portion of the Phase 3 trial.

The SunTrust team points out in the report that Phase 3 IGNITE-2 data should be out as early as sometime this quarter. This could prove to be gigantic for the company and set up the same kind of scenario as Cempra could experience, with a suitor starting to look hard at the company.

The SunTrust price target is set at $48, and the consensus estimate is $50.91. Shares closed trading on Friday at $47.55.

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The good thing for investors considering these stocks is previous clinical data has looked tremendous, and for Cempra and Tetraphase, solid final results and the blessing of the FDA are critical. It is important to remember these stocks are only suitable for very aggressive, risk-tolerant accounts.

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