Paratek Pharmaceuticals Inc. (NASDAQ: PRTK) was started as Outperform with a $30 price target at Robert W. Baird on May 13. What stands out here is that this was after a $12.68 prior closing price. Baird’s upside call was after news that Paratek received FDA affirmation for the design of its proposed omadacycline oral-only skin infection Phase 3 trial study.
Paratek shares closed up 6% at $14.10 on Friday, implying over 100% upside here. This may sound too good to be true, but Paratek’s 52-week range is $12.05 to $32.75, and it has a $250 million market cap. This stock used to trade exponentially higher, but it had to do a reverse stock split late in 2014 due to such a low share price.
Tesaro Inc. (NASDAQ: TSRO) was started as Outperform with a $56 price target at Credit Suisse on May 13. Its prior closing price was $41.09. The firm said that it has an underappreciated top emerging cancer pipeline, and it has abstract presentations at the key American Society of Clinical Oncology event in a few days.
Tesaro closed on Friday at $43.11 and has a 52-week range of $29.51 to $66.95. That means that it could rally 50% without hitting a 52-week high, and that its price is well above 50% higher than its 52-week low. Tesaro has a market cap of almost $2 billion, which is not too shabby for a company with revenues not really expected to be measurable until 2017.
Aduro BioTech Inc. (NASDAQ: ADRO) is featured last on list the recent bullish biotech and biohealth analyst calls because it had a wild week and the massive upside target came with a big price target cut. Aduro’s volatility was after bad cancer drug trial news. Its stock gapped down huge on May 16, to under $8.00 (after a prior close of $10.69) but closing at $8.91. It ended the week at $10.47, after a 6.5% gain on Friday.
Aduro was maintained as Outperform at FBR Capital Markets, but the target price was cut to $22 from $30. If the FBR research team is correct here, then Aduro could still deliver upside of more than 100%. This is a big if, and it needs to be noted that biohealth disappointments often occur over and over.
Aduro has a 52-week range of $7.27 to $37.49, and it still has a $676 million market cap. Thomson Reuters has Aduro’s consensus revenue targets at roughly $47 million for 2016 and $56 million for 2017 — after having been almost $73 million in 2015.
Again, be advised that some of these upside targets are so much higher than normal that they need to be considered as highly speculative. In some cases, some of these stocks could implode and not even exist if things do not turn out as expected. Other than Bulletin Board and Pink Sheet listed stocks, there is just no riskier place to invest outside of the speculative biotech space.