Both Mast Therapeutics Inc (NYSEMKT:MSTX) and StemCells Inc (NASDAQ:STEM) are in deep waters where few other biotech giants tread. While Mast is working on a pioneering sickle cell disease treatment, StemCell is using breakthrough technology to address nervous system and paralysis disorders. Let’s take a closer look to see why Maxim analysts are bullish on both stocks.
Mast Therapeutics Inc
When comparing Mast Therapeutics to Baxalta and Global Blood Therapeutics, analyst Jason McCarthy of Maxim notes that Mast has the advantage in the sickle cell arena. The analyst describes how testing of Baxalta’s sickle cell pipeline drug AES-103 was terminated, and GBT440 of Global Blood Therapeutics has “not been correlated with symptomatic improvement.” As a result, this playing field serves as an advantage to Mast’s vepoloxamer; the company’s lead pipeline candidate for sickle cell disease.
Vepoloxamer’s EPIC study is currently in Phase 3 testing and fully enrolled, making it the “largest ever placebo controlled study in sickle cell disease.” McCarthy describes how the study is correctly designed “based on a prior vepoloxamer failure,” which occurred before Mast acquired the drug. The analyst explains the test will have “the right patients and right endpoints in sickle cell that we believe increases the probability of success.”
McCarthy highlights that there are no approved drugs for the pain associated with sickle cell, which is “the most common manifestation of the disease.” If EPIC produces positive results, vepoloxamer will be the first drug of its kind. The analyst is confident that drug will be ramped quickly, if approved, because sickle cell doctors are on board with vepoloxamer and the 100K hospitalizations in the US associated with the disease take place in fewer than 200 hospitals.
McCarthy also points out that Mast is currently undervalued “for all the wrong reasons,” such as “a prior failure.” Due to the company’s advantage in the sickle cell playing field and its current value, McCarthy reiterates a Buy rating with a $5 price target, noting that investors “should be focused on Mast.”
According to TipRanks, both analysts who have rated Mast in the last 3 months are bullish on the stock with an average price target of $4, marking an overwhelming upside of over 1,000%. Jason McCarthy has a 39% success rate recommending stocks.
Jason Kolbert of Maxim weighs in on StemCells after the biotech company presented positive data on an ongoing study of HuCNS-SC cells, indicated to treat spinal cord injuries, at a medical conference late last week. Final data from the study will be released later this quarter.
The company announced six month results, indicating that five out of six patients enrolled demonstrated improved muscle strength, with four of these five patients also demonstrating improved motor skills. Kolbert also points out that “no adverse events were attributed to the cells.” The analyst is optimistic that the treatment works, noting that it is unlikely that the positive data is “lucky.”
If the treatment is to be commercialized, Kolbert believes there will be a “blockbuster” market for this indication of spinal cord injuries, allowing for “significant” upside. Going forward, the analyst believes the company will have “definitive proof of concept” that the treatment is effective in the next 12 to 18 months.
Due to this positive data and potential of the company’s spinal cord injury remedy, Kolbert reiterates a Buy rating on the company with a $3 price target.
According to TipRanks, both of the analysts who have rated StemCells in the last 3 months are bullish on the stock with an average 12-month price target of $1.75, marking over a 500% potential upside from current levels.