Cytori Therapeutics Inc: Should You Catch This Falling Knife?

Cytori Therapeutics Inc (NASDAQ:CYTX) shares are crashing over 60% in Monday’s trading session, after the biotech company disclosed that its pivotal STAR study assessing Habeo Cell Therapy for the treatment of scleroderma failed to achieve its primary endpoint at week 24 nor any of its secondary endpoints at week 24 or week 48.

However, Maxim analyst Jason Kolbert remains positive on the long term story for the company, reiterating a Buy rating, with a $10.00 price target, which represents a potential upside of 2226% from where the stock is currently trading.

Kolbert noted, “The totality of the data combined with the investigator comments matter and suggest to us that there maybe a window for approval based on the current data set and/or a small bridging study. As a result we are not changing our rating or valuation metrics at this time. Let’s sit tight and see what’s next.”

According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Jason Kolbert has a yearly average return of -9.4% and a 34% success rate. Kolbert has a -42.2% average return when recommending CYTX, and is ranked #4556 out of 4608 analysts.

TearLab Corp: A “Sell-on-the-News” Moment

On Friday, TearLab Corp (NASDAQ:TEAR) shares skyrocket nearly 90%, after the ophthalmic device maker announced that the commercial version of the TearLab Discovery System, a nextgeneration point-of-care molecular diagnostic platform, had gained CE Mark as an in vitro diagnostic medical device.

However, TEAR share price fell 15% today in a clear case of “buy on the rumor, sell on the news.”

H.C. Wainwright analyst Ram Selvaraju opined, “Though we do not expect any nearterm impact on top-line revenue from CE Marking of the Discovery System, we believe that TearLab would use the new system to build a clinical data package to support a 510(k) filing to the U.S. FDA in 2H 2017. In our view, the inclusion of inflammation biomarkers may boost the commercial footprint of the company’s diagnostic systems, since inflammation is a factor that doctors are familiar with and always looking for when diagnosing dry eye disease. We currently expect a global launch of the TearLab Discovery System in 2018.”

In the wake of the update, Selvaraju reiterates a Buy rating on TEAR with a $4.00 price target, which implies an upside of 47% from current levels. (To watch Selvaraju’s track record, click here)

Out of the 4 analysts polled in the past 12 months, 3 rate Tearlab stock a Buy, while 1 rates the stock a Hold. With a return potential of 88%, the stock’s consensus target price stands at $5.13.