4 Hot Biotech Stocks in 2017
July 31, 2017
By Mark Terry, BioSpace.com Breaking News Staff
If 2015 was a super-hot year for mergers and acquisitions in biopharma, 2016 was almost stone-cold. This year appears to be growing hot again, although nowhere near 2015, at least not yet. A research report by Deutsche Bank took a look at stocks with big catalysts for 2017, and 24/7 Wall Street narrowed Deutsche Bank’s top 10 to top four. Here’s a look.
1. Alexion Pharmaceuticals
Headquartered in New Haven, Conn., Alexion had a very bad 2015 and 2016 when it was struck by several scandals and U.S. Securities and Exchange Commission (SEC) investigations that resulted in the company’s chief executive officer and chief financial officer stepping down. Now under the leadership of Ludwig Hantson, the company appears to be making a turnaround, recently reporting strong earnings and planning to retool its research-and-development strategy.
Deutsche Bank gave the company stock a price target of $153 and the Wall Street consensus target is $155.17.
Alexion is currently trading for $137.26.
2. Biogen
Based in Cambridge, Mass., Biogen is best known for its dominance in the multiple sclerosis (MS) market, although in recent years it has pivoted toward Alzheimer’s and other neurological disorders. Earlier this year it received approval for Spinraza, for a rare disease, spinal muscular atrophy (SMA). In the first quarter, sales of Spinraza grew to $203 million, hinting at a blockbuster future.
Deutsche Bank gave it a $315 price target. The Wall Street consensus price target is $322.91.
Biogen is currently trading for $289.93.
3. Gilead Sciences
Located in Foster City, Calif., company stock rose about 3 percent since its second-quarter financial earnings last week. For its second quarter, the company reported Non-GAAP EPS of $2.56 on revenue of $7.14 billion, which blew past Wall Street consensus of $2.15 earnings on revenue of $6.37 billion. Although the company’s dominant hepatitis C (HCV) franchise is under attack, analysts suspect it’s bottoming out, and recently the European Commission approved its Vosevi for chronic hepatitis C, which was recently approved in the U.S.
Deutsche Bank’s price target was $79, with the Wall Street consensus price target was $76.50.
Gilead is currently trading for $76.14.
4. Neurocrine Biosciences
Headquartered in San Diego, Neurocrine had its Ingrezza (valbenazine) approved in April by the U.S. Food and Drug Administration (FDA) for adults with tardive dyskinesia (TD). It is the first and only treatment for TD approved by the FDA.
Neurocrine has also partnered with AbbVie on elagolix for endometriosis and uterine fibroids, and is working to develop opicapone as adjunct therapy for Parkinson’s disease.
In its report, Deutsche Bank wrote, “While expectations are relatively low for the first quarter of Ingrezza sales, it will be the key focus for the quarter. Payer reactions as well as anticipated demand (and timing for potential guidance) will also be important. The company reports earnings next week.”
Deutsche Bank gave a price target of $65. The Wall Street consensus price target is $70.77.
Neurocrine Biosciences is currently trading for $48.25.
Lee Jackson, writing for 24/7 Wall Street, says, “Four big opportunities for aggressive investors. There are also substantial risks, should current outcomes and clinical tests not play out favorably. With that in mind, some smaller speculative positions could be the right play for aggressive, risk-tolerant accounts.”