Healthcare Business

Jefferies Out With 5 Biotech Stocks Under $10 With Gigantic Upside Potential

Epizyme

This is another biotech company that has been seen as a takeover candidate. Epizyme Inc. (NASDAQ: EPZM) discovers, develops and plans to commercialize epigenetic therapies for cancer patients. The company develops small molecule inhibitors of other chromatin-modifying proteins.

Epizyme’s lead product candidate, tazemetostat, is a potent and selective inhibitor of the enhancer of zeste homolog 2 histone methyltransferases, an enzyme that plays an important role in various cancers. The company is evaluating tazemetostat in a Phase 2 study in adults with relapsed or refractory non-Hodgkin lymphoma, and one Phase 1 study in children with molecularly defined solid tumors. The company owns the global development and commercialization rights to tazemetostat outside of Japan.

Here, the stunning $22 Jefferies price target is in the same neighborhood as the $22.11 consensus target. The stock ended the week at $8.76 per share.

Immunogen

This is another aggressive play for accounts looking for a big winner. Immunogen Inc. (NASDAQ: IMGN) develops targeted cancer therapeutics using its antibody-drug conjugate (ADC) technology. An ADC with the company’s technology comprises an antibody that binds to a target found on tumor cells conjugated to one of its anti-cancer agents as a payload to kill the tumor cell once the ADC has bound to its target.

Immunogen’s product candidates include mirvetuximab soravtansine, IMGN779, IMGN632 and coltuximab ravtansine. Its portfolio is led by mirvetuximab soravtansine, a first-in-class ADC targeting folate-receptor alpha that is in a Phase 3 registrational trial called FORWARD I. Its FORWARD II trial consists of cohorts assessing mirvetuximab soravtansine in combination with Avastin (bevacizumab), Keytruda (pembrolizumab) and carboplatin.

The company also has developed tubulin-acting maytansinoid payload agents, which include DM1 and DM4, as well as deoxyribonucleic acid (DNA)-alkylating agents called IGNs.

Jefferies has set its Immunogen price target at $15. The posted consensus was last seen at $15.13, and the shares closed on Friday at $7.43 apiece.

Rigel Pharmaceuticals

The Jefferies team has covered this company for years, and the low price makes it an attractive target. Rigel Pharmaceuticals Inc. (NASDAQ: RIGL) is engaged in the discovering, developing and providing novel small molecule drugs that improve the lives of patients with immune and hematological disorders, cancer and rare diseases.

The company’s pioneering research focuses on signaling pathways that are critical to disease mechanisms. Its clinical programs include clinical trials of fostamatinib, an oral spleen tyrosine kinase inhibitor, in a number of indications.

Jefferies has a price target of $7. The consensus target is set at $8.14, and the shares closed at $2.98 on Friday.

These five super-aggressive biotech stocks are all rated Buy at Jefferies. It should be noted that these stocks are only suitable for accounts that have high risk tolerance. While their prices are low, the risk could be very high if clinical trial goals are not met.