The biotech sector has had a really cruel start to the year. The Nasdaq Biotechnology Index (IBB) is down 26% so far in 2016, and is now off about 40% since its July peak. Among the equities in focus today are biotech companies Exelixis, Inc. (NASDAQ:EXEL) Sangamo Biosciences, Inc. (NASDAQ:SGMO). Let’s take a look and see what analysts have to say about EXEL and SGMO.
In a research report issued today, Cowen analyst Eric Schmidt reiterated an Outperform rating on shares of Exelixis, after hosting an investor lunch with senior management of Exelixis.
Schmidt wrote, “Exelixis thinks an AdCom panel is “unlikely” for cabo given the nature of the supportive dataset (the pivotal METEOR trial achieved its PFS, OS, and ORR endpoints). Management also notes that last week’s interim OS analysis was conducted with the FDA’s blessing and that the agency will have the survival data in hand to include on a potential initial label.” Furthermore, “While management stopped short of predicting an early FDA approval for cabo, it did promise to be prepared for a U.S. launch should such an approval transpire. Exelixis has scaled up its commercial team quite substantially and will likely have 60-90 reps hired by April 1. RCC is an increasingly competitive marketplace and management noted that it will not cut corners on its marketing budget, but rather will give cabo the full quality of support it deserves.”
The analyst concluded, “We view EXEL shares as undervalued in relation to cabo’s $400MM U.S. potential in advanced RCC.”
According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Eric Schmidt has a yearly average return of 13.2% and a 34% success rate. Schmidt has a -19.2% average return when recommending EXEL, and is ranked #215 out of 3569 analysts.
Out of the 4 analysts polled by TipRanks, 3 rate Exelixis stock a Buy, while 1 rates the stock a Hold. With a return potential of 55%, the stock’s consensus target price stands at $6.50.
Sangamo Biosciences, Inc.
Wedbush analyst Liana Moussatos reiterated an Outperform rating on shares of Sangamo, with a price target of $30, following the company’s fourth-quarter results and update on its clinical progress.
Moussatos noted, “Sangamo provided 2016 guidance of $20MM-$25MM for revenues, $85MM-$95MM for Op Ex., and guided towards ending 2016 with cash and cash eq. of at least $150MM. We have adjusted our model to include 2016 guidance and project cash runway into 2019. Cash runway into 2019 covers several potentially transformative clinical catalysts.”
“Sangamo is on track to begin Phase 1/2 clinical testing in H1:16 for ZFPbased SB-FIX for hemophilia B and in mid-16 for SB-318 in Hurler syndrome. We note that these programs are the first in-vivo genome editing programs cleared by the FDA for human testing and are the first two of six programs utilizing Sangamo’s In-Vivo Protein Replacement Platform (IVPRP) expected to be in clinic in the next 6-24 months. While management has not guided towards data release, we estimate preliminary efficacy data from these studies could be released in late 2016 or the first half of 2017. In our view, positive data from either trial could potentially provide read-through to the other IVPRP programs and be a significant value creation catalyst for the stock,” the analyst continued.
According to TipRanks.com, analyst Liana Moussatos has a yearly average return of 0.6% and a 31.6% success rate. Moussatos has a -38.6% average return when recommending SGMO, and is ranked #1275 out of 3569 analysts.
As of this writing, all the 6 analysts polled by TipRanks rate Sangamo stock a Buy. With a return potential of 241%, the stock’s consensus target price stands at $16.75.