Many investors hope to win big on biotech stocks as shares can skyrocket when there is good news. Maxim analysts explain why there are plenty of promising developments in store for AEterna Zentaris Inc. (USA) (NASDAQ:AEZS) and Vertex Pharmaceuticals Incorporated (NASDAQ:VRTX), while raising their price targets. Let’s take a closer look.
AEterna Zentaris Inc. (USA)
AEterna shares skyrocket nearly 130% in Wednesday’s trading session, following the news that the FDA has accepted the drug maker’s New Drug Application (NDA) for Macrilen (macimorelin), a novel orally-active ghrelin agonist intended to help in monitoring treatment for adult growth hormone deficiency (AGHD). Aeterna is now continuing to build commercial organization and infrastructure to prepare for a 1Q18 launch.
In reaction, Maxim analyst Jason Kolbert reiterates a Buy rating on shares of Aeterna, while doubling the price target to $4.00 (from $2.00), which implies an upside of 59% from current levels. (To watch Kolbert’s track record, click here)
Kolbert commented, “If approved, Macrilen would be the only FDA-approved drug for the assessment of AGHD (Adult Growth Hormone Deficiency). As a reminder, the only test used for AGHD, the insulin tolerance test (ITT), is difficult to perform and has significant risks for the patient. Macrilen is a safer test than ITT and can be repeated with accuracy multiple times. Macrilen could become the new standard for addressing AGHD and be rapidly adopted by physicians.”
“We update valuation metrics forward to 2018, with some other minor adjustments. The net effect is our price target goes to $4, from $2,” the analyst added.
As of this writing, the 3 analysts polled by TipRanks (in the past 3 months) rate Aeterna stock a Buy. With a return potential of 65%, the stock’s consensus target price stands at $4.17.
Vertex Pharmaceuticals Incorporated
Vertex investors have a smile on their faces today, after the company announced strong data from Phase 1/2 trials of three different triple drug regimens in Cystic Fibrosis. Vertex shares closed at $159.76, up $27.60 or 21%.
In the wake of the exciting news, Maxim’s Jason McCarthy reiterated a Buy rating on Vertex shares, while boosting the price target to $195 (from $143), which represents a potential upside of 22% from where the stock is currently trading. (To watch McCarthy’s track record, click here)
McCarthy opined, “The FEV1 improvements are the best we have seen, better than Kalydeco, Orkambi and tez/iva. Vertex is poised to unlock up to 90% of the CF (cystic fibrosis) market..”
“Based on the triple combination(s), we have increased the market share in the heterozygote populations as well as expanded the number of eligible patients as we assume that triple combos will be effective in additional compound mutation types. With a 10% discount rate, the net effect is our price target increases to $195,” the analyst added.
Out of the 18 analysts polled by TipRanks (in the past 3 months), 16 rate Vertex stock a Buy, while 2 rate the stock a Hold. However, with a slight downside potential, the stock’s consensus target price stands at $158.85.