This stock has been on a total roller-coaster ride over the past year. Medicines Co. (NASDAQ: MDCO) goal is to be a leading provider of solutions in three areas: serious infectious disease care, acute cardiovascular care and surgery and perioperative care. The company is focused on saving lives, alleviating suffering and contributing to the economics of health care by focusing on 3000 leading acute/intensive care hospitals worldwide.
The stock shot up in the fall when the company announced news that an experimental cholesterol drug being co-developed with Alnylam Pharmaceuticals lowered LDL-C or “bad” cholesterol levels by around 83% in a small, early stage study. The drug, ALN-PCSsc, is an injected RNAi therapy designed to block the expression of the enzyme PCSK9, a protein that plays a critical role in regulating circulating levels of bad cholesterol in the blood.
The Jefferies team expects Phase 2 data for MDCO-216 and ALN-PCSsc, as well as Phase 3 data for Carbavance, all this year. Some Wall Street analysts are currently assigning a 60% probability of success to Carbavance, and successful Phase 3 data would take the probability much higher, and could lift the stock $3 to $4 higher.
Jefferies has a $43 price target for the stock, but the consensus target is higher at $48.60. The share price at Tuesday’s close was $35.50.
The Jefferies analysts are bullish on the earnings growth potential for this specialty pharmaceutical company. Supernus Pharmaceuticals Inc. (NASDAQ: SUPN) is focused on developing and commercializing products for the treatment of central nervous system diseases. Not only does the company have two marketed products for epilepsy, Oxtellar XR (extended-release oxcarbazepine) and Trokendi XR (TXR) (extended-release topiramate), it also is developing several product candidates to address large market opportunities in psychiatry. These include SPN-810 for the treatment of impulsive aggression in ADHD patients and SPN-812 for the treatment of ADHD.
The Jefferies analysts see the potential for a whopping 25% earnings growth for the company, and they cite strong growth from the epilepsy drugs as a catalyst. They also feel that the TXR exclusivity will last out to 2022, up from the current 2020. In addition, they cite upcoming catalysts for the rest of this year, as well as the potential for the company to make accretive acquisitions as additional positives.
Jefferies has set a price target of $23 for the stock. Here too, the consensus target is higher, at $27.29. The shares closed most recently at $17.75.
While the Jefferies growth stocks are better suited for more aggressive accounts, they all are well priced for a current entry point, and they have very strong underlying fundamentals that can lead to a very positive second half of 2016.