Source: Yahoo Finance
On Dec. 17, GuruFocus reported that in a July article, Kiplinger identified Morphic Holding Inc. (NASDAQ:MORF) as one of five emerging biotechnology companies that could have a blockbuster drug–one that could hit $1 billion in sales–in their future.
Let’s take a look at the four other companies with great expectations.
Akero Therapeutics Inc. (NASDAQ:AKRO) is a South San Francisco-based company that was founded in 2017. Akero’s research and development programs are focused on finding treatments for patients with non-alcoholic steatohepatitis (NASH) and other life-threatening metabolic disorders. In its short existence Akero already has drugs in the second phase of testing with Food and Drug Administration approval, a rarity among young biotechnology companies.
Akero’s lead candidate received approval from the FDA to test the new treatment on patients who have been diagnosed with NASH, which affects liver function and can lead to cirrhosis, cancer, liver failure and death.
At just under $19, the company is trading near its 52-week low of about $16; it has topped $30 during the same period. The stock appears to be substantially undervalued. According to an article in CNN Money, the four analysts offering 12-month price forecasts have a median target of $32.50, with a high estimate of $35 and $28 on the low end. The company is rated a buy.
Dermira Inc. (NASDAQ:DERM) is concentrating on developing therapies that address chronic skin conditions that affect millions of people. This includes excessive sweating and dermatitis, which can lead to severe itching. In August 2017, 10-year-old Menlo Park, California-based Dermira signed an agreement with Roche (RHHBY) to acquire exclusive worldwide rights for lebrikizumab for atopic dermatitis. The drug, which received fast track approval from the FDA, is now in Phase 3 testing.
Cantor Fitzgerald analyst Louise Chen thinks lebrikizumab and the company’s only marketed product–the medicated cloth Qbrexa for underarm sweating–both have blockbuster potential.
Even though Dermira is trading only about $2 under its 52-week high of $15.48, analysts think the company has upside. They’ve given the stock a mean price target of $23.50, with a high of $29 and a low of $15, according to a recent article in New Mercury. Of the eight analysts following the company, seven rate it a buy and one sees it as a hold.
Global Blood Therapeutics Inc. (NASDAQ:GBT) has earned an overweight rating at JPMorgan, with analyst Matthew Holt boosting the company’s target price $10 to $90, according to an article in The Fly. The San Francisco-based company currently trades just a few dollars under its 52-week high of nearly $80.
Last month, the FDA approved Global’s drug to treat sickle cell disease in adults and children. Oxbryta is the second drug approved for the disease, and the first aimed at the cause of sickle cell instead of the symptoms. The first was Novartis AG’s (NYSE:NVS) Adakveo, which cuts the pain associated with sickle cell. Oxbryta will likely be used in combination with the Novartis medication.
Holt thinks Oxbryta has a chance to do better than expected next year and sales beyond 2020 could be enhanced if the company gains approval to market the drug to treat pediatric cases in the U.S. and internationally.
The FDA estimates that 100,000 people in the U.S.–and 20 million globally–live with sickle cell disease.
Moderna Inc. (NASDAQ:MRNA) should be a core long-term holding for investors looking for exposure to the genomics revolution and the emergence of genetic medicines, according to Chardan Capital’s Gbola Amusa, who began coverage of the company in June with a $40 price target. He liked the potential of Moderna’s mRNA therapeutics platform to establish a new, “disruptive” class of medicines.
Scientists think many illnesses can be stopped, or prevented altogether, by altering the natural process of mRNA decoding. Moderna’s pipeline is flush, with 22 drugs in various phases of testing.
River Roll recently reported that Moderna earned an average rating of buy from the 12 brokerages currently covering the company. One investment analyst has rated the stock with a hold recommendation, but 11 have it as a buy. The average one-year price target among brokers that have updated their coverage on the stock in the last year is $25.78.
Moderna trades at about $19.50, about in the middle of its 52-week high and low of about $12 and $30, respectively. The company has a lofty market cap of $6.5 billion.
Credit : GuruFocus
Date : December 20, 2019