Biotech Beat: Analysts Weigh In on Synthetic Biologics Inc (SYN) and Heron Therapeutics Inc (HRTX)


Analysts and investors alike are anticipating what the future holds for Microbiome-focused company Synthetic Biologics Inc (NYSEMKT:SYN) and biotechnology company Heron Therapeutics Inc (NASDAQ:HRTX) as both companies have recently announced clinical trial results. Here is what analysts are saying.

Synthetic Biologics Inc

Griffin’s healthcare analyst Keith Markey weighed in with a few insights on Synthetic Biologics, after the company presented data from its novel SYN-004 program that demonstrated SYN-004 protected the gut microbiome from damage often caused by the intravenous beta-lactam antibiotic, ceftriaxone, in a pilot study of humanized pigs.

Markey noted, “Investors gave Synthetic Biologics little credit for the proof-of-concept data on a day in which the biotech sector suffered from concerns over a Hillary Clinton drug pricing scheme. We believe pricing limits could have a wide-spread effect on the biotech/pharma industry. But we also think that Synthetic’s two lead drugs, SYN-004 and SYN-010, which is a therapy for constipation-predominant irritable bowel syndrome, are at less risk given the potential for substantial cost savings and reduced healthcare resource utilization with their use.”

The analyst concluded, “SYN-004 is in a Phase 2a study that should report data shortly and a Phase 2b trial is expected to commence soon. Similarly, top-line data from a clinical trial of SYN-010 should be available in early 2016. The recent price weakness offers an attractive entry point, in our opinion.”

Markey reiterated a Buy rating on Synthetic Biologics shares, with a price target of $9, which implies an upside of 191% from current levels.

According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Keith Markey has a total average return of -13.2% and a 33.3% success rate. Markey has a 27.2% average return when recommending SYN, and is ranked #3520 out of 3766 analysts.

Out of the 5 analysts polled by TipRanks, 4 rate Synthetic Biologics stock a Buy, while 1 rates the stock a Hold. With a return potential of 113%, the stock’s consensus target price stands at $6.60.

Heron Therapeutics Inc

In a research report issued today, Brean Capital analyst Jonathan Aschoff reiterated a Buy rating on shares of Heron Therapeutics, while raising the price target to $55 (from 45), after the company announced positive top-line results from its Phase 2 trial of HTX-011 for the treatment of post-operative pain after bunionectomy.

Aschoff commented: “We believe that the pace of HTX-011 development will be rapid enough to allow for a 2H17 approval, earlier than our previous expectation. We are highly encouraged by the efficacy and durability of effect it has shown and believe that it will compete well against peer drugs. Given the favorable comparison thus far versus Exparel, despite the cross trial comparison caveats and smaller sample size in the HTX-011 trial, we project HTX-011 to have a higher price and drive significant value. Exparel has been successful, but Heron has the luxury of learning extremely timely and free lessons from Pacira’s experience, and thus will run a broader set of registrational trials as well as show that HTX-011 and its derivatives can also beat generic bupivacaine.”

According to TipRanks.com, analyst Jonathan Aschoff has a total average return of 5.2% and a 45.8% success rate. Aschoff has a 110.8% average return when recommending HRTX, and is ranked #593 out of 3766 analysts.

All the 4 analysts polled by TipRanks rate Heron Therapeutics stock a Buy. With a return potential of 31.6%, the stock’s consensus target price stands at $53.75.

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