Friday turned out to be a nightmare for shareholders of Juno Therapeutics Inc (NASDAQ:JUNO) and T2 Biosystems Inc (NASDAQ:TTOO), as shares of both companies fell sharply due to various challenges and setbacks. Below, healthcare analysts put in their two cents on the developments.
Juno Therapeutics In
Juno Therapeutics shares lost 31% of their value today after the company announced that its Phase II ROCKET trial of JCAR015 in adult patients with r/r B-cell acute lymphoblastic leukemia (ALL) was placed on clinical hold by the FDA on July 6, following two patient deaths in the trial last week.
However, Cowen analyst Chris Shibutani remains positive, reiterating an Outperform rating and price target of $55, which represents a potential upside of 96% from where the stock is currently trading.
Shibutani commented, “We believe the issue is manageable, and think the steps Juno is taking are reasonable. Based on the information provided thus far, we believe the company’s interpretation and proposed solution is a reasonable and valid. The data thus far is that the JCAR015 product with Cy preconditioning in Adult ALL has an acceptable tolerability profile, based on phase I data and early ROCKET data (before the protocol amendment to add Flu). We believe management’s declaration that approval timelines are more likely in 2018, than 2017, is prudent.”
“We believe investors should stay the course – both with CAR-T in general, and JUNO shares specifically. With JUNO shares down 25-30%, the familiar “shoot first and pessimistically ask a lot of questions later” approach seems in full force,” the analyst concluded.
As usual, we recommend taking analyst notes with a grain of salt. They are often successful in moving the stock price, but you always need to take things into perspective. According to TipRanks.com, analyst Chris Shibutani has a yearly average return of -2.9% and a 33.3% success rate. Shibutani has a 8.0% average return when recommending JUNO, and is ranked #2804 out of 4018 analysts.
Out of the 7 analysts polled by TipRanks (in the past 3 months), 5 rate Juno Therapeutics stock a Buy, while 2 rate the stock a Hold. With a return potential of nearly 99%, the stock’s consensus target price stands at $57.17.
T2 Biosystems Inc
Shares of T2 Biosystems are down almost 30% today after the company reported that customers were receiving invalid test results with the T2Candida panel. In reaction, the company stopped shipments of the product in the last week of June and will replace customers’ inventories with product made with a prior manufacturing process.
Following the news, WBB Securities analyst Stephen Brozak reiterated a Buy rating on shares of T2 Biosystems, with a price target of $11.
The analyst wrote, “We have seen this many times before. A small company with an important device or diagnostic technology hits bumps on the road to commercialization, sometimes stumbling with a sales strategy, usually encountering a manufacturing or sourcing issue as processes burn in. The manufacturing issues we have seen time and again have almost always been with a consumable portion of the device or diagnostic as manufacturing ramps to scale. Investors should anticipate such risks at this point as most device and diagnostic companies will confront such challenges. A good company with good management will deal with them swiftly, learn from any mistakes, and move on as a stronger organization. Further, the issues described by TTOO management are not with the underlying technology, but with a manufacturing process for which corrective action has been taken. Therefore, we see this manufacturing setback at TTOO as a known hazard of investing in this sector and feel comfortable in the fact that management was transparent with the issues they have been facing and the tactics they are employing to resolve them.”
According to TipRanks, analyst Stephen Brozak has a yearly average return of 13.5% and a 50% success rate. Brozak has a 14.3% average loss when recommending TTOO, and is ranked #542 out of 4018 analysts.
Out of the 7 analysts polled by TipRanks, 4 rate T2 Biosystems stock a Buy, 2 rate the stock a Hold and 1 recommends a Sell. With a return potential of 96%, the stock’s consensus target price stands at $10.60.
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