Healthcare Business

5 Speculative Biotech Analyst Picks With Upside Targets of 100% to 400%

The Other Constellation

Constellation Pharmaceuticals Inc. (NASDAQ: CNST) has seen its quiet period come to an end, and the analysts began coverage on August 13. One of the firms sees a doubling of the shares. Oppenheimer began coverage as Outperform and with a $21 price target, some 100% higher than Friday’s $10.45 close.

BMO Capital Markets started it with an Outperform rating and a $19 price target, while JPMorgan started it was Outperform with a $17 price target. This new set of targets compares with a $9.85 prior closing price, so the stock did rise after the analysts issued new coverage.

The post-IPO range has been $9.00 to $12.21, and Constellation Pharma had a $269 million market cap. The company is serious about unmet medical needs in patients with cancers associated with abnormal gene expression or drug resistance.

Eiger Remains a Key Drug Pipeline Pick

Eiger BioPharmaceuticals Inc. (NASDAQ: EIGR) has been viewed positively by Wedbush Securities for quite some time, and the firm’s bullishness has remained consistent through ups and downs (even after bad news). Wedbush sees Eiger continuing to advance its pipeline and as having a healthy cash position of $73.5 million, which should fund the company through the first quarter of 2020. This includes covering the potential U.S. approval of lonafarnib for progeria, as well as the initiation of Phase 3 programs for lonafarnib in hepatitis delta, Exendin (9-39) for post-bariatric hyperglycemia and ubenimex for lymphedema. Wedbush sees multiple material catalysts expected in the second half of 2018.

The firm sees the recent pullback in Eiger as an attractive buying opportunity. Shares dipped back under $10 this week but closed Friday at $11.85. It has a 52-week range of $7.46 to $18.00 and a $162 million market cap.

The firm has a street-high target of $53, implying some 400% upside, if it is correct. The consensus target, including this sky-high target here, is closer to $30, and the lowest price target is listed as $21.

Radius Meets the RIC Report

Radius Health Inc. (NASDAQ: RDUS) was featured this past week after the Merrill Lynch RIC Report for August raised its weighting in health care to Overweight. Radius Health is among the Merrill Lynch buy ratings in health care and biotech, and the firm’s $47 price objective compares with a recent level of $20.00 a share.

That big upside is based on a probability-adjusted net present value of the company’s lead pipeline asset, abaloparatide at $26 per share, RAD1901 at $18 per share and $3 in cash per share. Radius has a $900 million market cap, and its consensus target price from Thomson Reuters is $40.67.

And Others

There also were some runner-up analyst calls this week in biotech with upside that is under 100% but still rather high for speculative investors.

Corvus Pharmaceuticals Inc. (NASDAQ: CRVS) was assumed with an Outperform rating at Credit Suisse, and the prior $11 target price was adjusted to $15. That’s more than 50% higher than the $9.70 share price after Wednesday’s call, and that was even after a 6.5% gain at the time. Corvus’s lead product, CPI-444, was said to have a clear lead in the clinic compared to competitors and was said to look like a compelling treatment for the growing market of PD-1 refractory patients. The 52-week trading range is $7.42 to $17.63, and the market cap at the time was $284 million.

Replimune Group Inc. (NASDAQ: REPL) was started with an Outperform rating and assigned a $31 price target at BMO Capital Markets. JPMorgan started it as Outperform with a $26 price target. Shares closed up 1.1% at $17.10 on Monday when the calls were made, and they ended the week at $17.44.

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