Investors have been treated like rented mules by the market so far here in October. More than 75% of the S&P 500 (including the biotech sector) is now in official correction mode.
Hopefully solid earnings reports that delivered another quarter of 20% profit growth help to buoy the market this week. The rise in interest rates that initially spooked the market to begin October seems to be ebbing a bit. The 10-year Treasury yield is down some 10 basis points from October 5th’s seven year high of 3.26%.
While we await the market sentiment to improve, here are four small biotech stocks garnering positive analyst attention today.
The LIBRETTO data update for LOXO-292 at the recent Association supports our positive outlook for Loxo Oncology. Our analysis shows that Breakthrough Designation can reduce FDA-approval time by 40%, and only 20% of sponsors receive the designation. Data for LOXO-292 have continued to be positive with each update. LOXO-292 is a wholly owned compound of Loxo Oncology, which we anticipate could launch in 2021 with estimated sales of $394.6 million and increasing to $3.8 billion in 2024, accounting for nearly 73% of Loxo’s estimated 2024 total product sales. Our financial outlook for Loxo Oncology remains unchanged for 2018-2024.”
We are upgrading our rating of VBLT to 12-month price target of $3.00 per share. We derive our price target based on the average of two valuation methods: 1) price-sales multiple analysis applying an 6x multiple to our 2026 sales estimate discounted at 18%; and 2) price-earnings multiple analysis applying an 19x multiple to our 2026 estimated earnings discounted at 18%. 1) clinical; 2) regulatory; 3) commercial; 4) partnership; 5) financial; and 6) intellectual property.”
The stock could certainly use the help as it has been an absolute dismal performer so far in 2018 for shareholders.
Kalvista Pharmaceuticals (KALV) has been a stellar performer in 2018 until pulling back recently with the sector. Today, the shares are initiated as a new Buy with a $33 price target at Stifel Nicolaus. The analyst there states that ‘the company’s lead asset KVD900, an oral plasma kallikrein inhibitor, has a “realistic shot” at being a best-in-class acute therapy for hereditary angioedema.” He also thinks ‘clinical results from competitor BioCryst “corroborate the viability of the oral kallikrein inhibitor approach but simultaneously leave room for improvement.”
We reiterate the Overweight rating and $62 PT for AIMT stock. Clinical data support the notion, in our view, that AR101 is safe and effective for treating hypersensitivity to peanut protein and that, given the unmet medical need, it could become an important treatment for the condition. With proof of concept demonstrated for the company’s ImmunoTherapy (CODIT) regimen, we believe investors should consider the potential that CODIT could be useful for treating other food-related hypersensitivities such as egg and walnut.”