This is a favorite mid-cap biotech pick at RBC for 2018. Sarepta Therapeutics Inc. (NASDAQ: SRPT) focuses on the discovery and development of RNA-based therapeutics for the treatment of rare, infectious and other diseases. Its lead product candidate is eteplirsen, an antisense phosphorodiamidate morpholino oligomer therapeutic that is used for the treatment of individuals with Duchenne muscular dystrophy, a genetic muscle-wasting disease caused by the absence of dystrophin.
The RBC report noted this:
In the mid-cap commercial space we like Sarepta Therapeutics given the robust start to the US EXONDYS 51 launch, as well as upcoming potential catalysts next year including FDA meeting for golodirsen in the first quarter, The Committee for Medicinal Products for Human Use opinion for EXONDYS 51 in the first half of 2018, and first data from the broader pipeline including gene therapy and Peptide phosphorodiamidate morpholino oligomers.
The $67 RBC price target is less than the consensus target of $69.47. The shares closed Wednesday at $55.05.
This lower profile stock makes sense for aggressive accounts. Agios Pharmaceuticals Inc. (NASDAQ: AGIO) is a clinical-stage biopharmaceutical company. Its therapeutic areas of focus are cancer and rare genetic metabolic disorders, which are a group of over 600 rare genetic diseases caused by mutations, or defects, of single metabolic genes.
The company’s cancer product candidates are enasidenib and ivosidenib (AG-120), which target mutated isocitrate dehydrogenase 2 (IDH2) and isocitrate dehydrogenase 1 (IDH1), respectively, and AG-881, which targets both mutated IDH1 and mutated IDH2. These mutations are found in a range of hematological malignancies and solid tumors.
RBC has stayed very positive on the stock and this is why:
We remain bullish on the company on our increased confidence in their IDH cancer mutations franchise and potential for the wholly owned ivosidenib to follow the same rapid approval pathway as Celgene and Agios Idhifa. IDH inhibition is gaining recognition for its differentiated and complementary mechanism to the current standard of care, and should continue to see an expedited path to market for rel/ref and potentially even the 1L setting in unfit Acute myeloid leukemia patients given significant unmet need.
RBC has set its price target at $80. The consensus price objective is $77.11, and shares closed Wednesday at $52.57.
This lesser known biotech is a favorite small cap at RBC with big upside potential. AnaptysBio Inc. (NASDAQ: ANAB) is engaged in developing antibody product candidates focused on unmet medical needs in inflammation and immuno-oncology. It develops product candidates using its antibody discovery technology platform, which is designed to replicate, in vitro, the natural process of antibody generation.
The company’s product pipeline includes ANB020 and ANB019, which are being developed to treat severe inflammatory disorders with unmet medical need. Its ANB020 product candidate is an antibody that inhibits the activity of interleukin-33 and is used for the treatment of severe adult asthma and severe adult peanut allergy.
The RBC report said:
Into the first quarter peanut allergies and in the second quarter severe asthma ph2a readouts for ANB020. We remain positive towards ANB020’s IL-33 mechanistic rationale for these large and attractive indications, and note potential for ANB020 to be first-in-class for chronic prophylaxis in adult peanut allergies and best-in-class in severe asthma via broad and differentiating efficacy regardless of eosinophil status.
The RBC price objective is $108. The consensus target price is $87.63, and the stock closed Wednesday at $91.83.
RBC also has Outperform ratings on Alder Biopharmaceuticals Inc. (NASDAQ: ALDR), Dynavax Technologies Corp. (NASDAQ: DVAX) and Abeona Therapeutics Inc. (NASDAQ: ABEO).
These eight top picks for 2018 all have the potential for big upside moves. Remember that biotech stocks are extremely volatile and only suitable for hyper-aggressive accounts with big risk tolerance.