As the biotechnology sector remains flat-to-down year-to-date, Wedbush analysts David Nierengarten and Heather Behanna weighed in on a handful of stocks on October 5 “that have made significant progress in the past year but whose shares have not appreciated commensurately,” including Novavax, Inc. (NASDAQ:NVAX) and bluebird bio Inc (NASDAQ:BLUE). Below are the highlights from the report and reasons why the analysts believe now is a good buying opportunity.
Novavax, Inc. recently released positive data from the Phase 2 maternal immunization study for respiratory syncytial virus, or RSV. RSV is contagious and can occur in anyone, but is most noticeable in young children and the elderly populations with compromised immune systems.
Novavax tested its vaccine in healthy women in their third trimester of pregnancy in order to observe the safety and immunogenicity of the vaccine throughout the first year of the infant’s life. The company also announced positive top-line data for a clinical trial of a RSV vaccine in older adults (ages 60 and older). The vaccine was well-tolerated and achieved its primary, secondary, and exploratory objectives.
The company also released positive data for three other trials, including its quadrivalent flu vaccine, its pandemic flu vaccine, and its Ebola vaccine.
Wedbush analyst Heather Behanna expects “the company to test the potential for a pentavalent respiratory vaccine for both flu and RSV” in 2016. She currently has an Outperform rating on the stock.
On average, Behanna has a 55% success rate recommending stocks and a +19.5% average return per recommendation when measured over a one-year horizon and no benchmark.
bluebird bio Inc
bluebird bio Inc develops gene therapies for severe genetic and rare diseases. The company is expected to announce updates from its immunotherapy program at the 2015 American Society of Hematology Annual Meeting in December.
The company has had a successful 2015 so far ever since bluebird used its LentiGlobin gene therapy to cure a sickle cell patient. Additionally, bluebird has seen continued positive results (cures) of beta-thal. The drug achieved regulatory clarity with FDA requiring just two 15 patient studies in beta-thal patients for approval, and collaborated with Kite Pharma in an effort to develop treatment for HPV-driven cancers.
David Nierengarten of Wedbush expects “significant newsflow over the next 12-18 months, beginning with updates for its LentiGlobin studies at this year’s ASH meeting (December), continued throughout next year, and with the initiation of a CAR-T study (likely the first TCR-engineered program with KITE).” The analyst currently has an Outperform rating on the stock.
On average, Nierengarten has a 51% success rate recommending stocks and a +51.8% average return per recommendation when measured over a one-year horizon and no benchmark.