One of the interesting things about the IPO market is that often after the original excitement about the initial public offering fades, investors forget about the companies, and they tend to sometimes get lost in the shuffle. The good thing for investors is that sometimes, but not always, the initial float from the deals are rather small, and that bodes well when the companies start reporting earnings, especially if they are positive.
We ran a screen of the Merrill Lynch research universe looking for IPOs that priced over the last year or so, and found three very intriguing stocks that may be just the ticket for aggressive trading accounts. All of the stocks that we found are rated Buy at Merrill Lynch, and all could be great additions to portfolios for an end of the year run.
This stock had a super-successful IPO back in the spring, but after skyrocketing up it has been cut in half. Aduro Biotech Inc. (NASDAQ: ADRO) is a clinical-stage immunotherapy company focused on the discovery, development and commercialization of therapies that transform the treatment of challenging diseases. Aduro’s technology platforms, which are designed to harness the body’s natural immune system, are being investigated in cancer indications and have the potential to expand into autoimmune and infectious diseases.
Aduro’s LADD technology platform is based on proprietary attenuated strains of listeria that have been engineered to express tumor-associated antigens to induce specific and targeted immune responses. Based on compelling clinical data in advanced cancers, this platform is being developed as a treatment for multiple indications, including pancreatic, lung and prostate cancers, mesothelioma and glioblastoma.
Merrill Lynch remains very positive and noted that Aduro recently announced a milestone payment from Janssen for the submission of an IND for ADU-214 in advanced non-small cell lung cancer. The dose-escalating Phase 1 study will evaluate safety and immunogenicity of intravenously administered ADU-214. Janssen is expected to commence the study by the end of this year. Aduro could be eligible to receive up to $786.5 million in additional milestone payments and royalties on worldwide sales.
The Merrill Lynch target price for the stock is $40, and the Thomson/First Call consensus price target is higher at $47. Shares closed Friday at $27.02.