Despite the market volatility, the biotech sector continues to outperform the broad market, and with the second-quarter earnings reports out of the way, analysts across Wall Street have had a chance to review the results and make some calls for going forward. In a new research report, JPMorgan highlights its favorite biotech stocks to buy after the second-quarter earnings print. The report divided the stocks into five different “buckets” and we screened the stocks for those with the best upside potential. Three top candidates popped up.
The rumors have flown for some time that this stock might be a potential acquisition target, but in the spring it was the big buyer. Alexion Pharmaceuticals Inc. (NASDAQ: ALXN) bought Synageva Biopharma for a whopping $8.4 billion in cash and stock. That move added products and pipeline to compliment Soliris, the company’s only marketed product. Soliris is prescribed for the treatment of patients with myasthenia gravis, a rare neurological disorder, which reportedly affects an estimated 13,600 people in the United States.
While Soliris sales beat consensus estimates when the company reported earnings, and 2015 revenue guidance was increased, it was below what some on Wall Street expected. The JPMorgan analysts feel it may be conservative, and they think the company could post better sales than expected and are higher on guidance for 2015. They rate the stock as a core biotech holding.
The analysts also point out that Alexion is no longer in what they term a “clinical data vacuum,” with plenty of late and intermediate stage clinical pipeline readouts in the next 12 to 18 months.
The JPMorgan price target for the stock is $249. The Thomson/First Call consensus price target is $225.61. The stock closed on Wednesday at $191.01.