Cantor Fitzgerald analyst Louise Chen raised the price target on I-Mab (NASDAQ: IMAB) to $76.00 (from $55.00).
Thursday, February 4, 2021
'Strong Buy Penny Stocks With Over 200% Upside Potential'
Let’s talk about risk and the big picture. It’s an appropriate time, as the big risk – presented by the COVID-19 pandemic – is finally receding thanks to the ongoing vaccination program. COVID is leaving behind an economy that was forced into shutdown one year ago while in the midst of a great expansion, boosted by the deregulation policies. While the new Biden Administration is busy reversing many Trump policies, at least for now the economy is rebounding.
And this brings us to risk. A time of economic growth and rebound is a forgiving time to move toward risk investments, as general economic growth tends to lift everything. Two strategists from JPMorgan have recently chimed in, promoting the view that the market’s fundamentals are still sound, and that small- to mid-cap sector is going to keep rising.
First, on the general conditions, quant strategist Dubravko Lakos-Bujas wrote, “Although the recent technical selloff and short squeeze is receiving a lot of attention, we believe the positive macro setup, improving fundamentals and COVID-19 outlook, strength of the US consumer, as well as the reflation theme remain the bigger forces at play. Not only should this drive further equity upside, but it remains favorable for continued rotation into economic reopening…”
Building on this, Eduardo Lecubarr, chief of the Small/Mid-Cap Strategy team, sees opportunity for investors now, especially in the smaller value stocks.
“We stick to our view that 2021 will be a stockpicker’s paradise with big money-making opportunities if you are willing to go against the grain… Many macro indicators did fall in January but SMid-Caps and equities in general continued to edge higher,” Lecubarr noted.
And if you are prone to look at high-risk, small- to mid-cap stocks, you’ll find yourself drawn to penny stocks. The risk involved with these plays scares off the faint hearted as very real problems like weak fundamentals or overwhelming headwinds could be masked by the low share prices.
So, how should investors approach a potential penny stock investment? By taking a cue from the analyst community. These experts bring in-depth knowledge of the industries they cover and substantial experience to the table.
Bearing this in mind, we used TipRanks’ database to find two compelling penny stocks, according to Wall Street analysts. Both tickers boast a Strong Buy consensus rating and could climb over 200% higher in the year ahead.
CNS Pharmaceuticals (CNSP)
We will start with CNS Pharmaceuticals, a biotechnology company with a focus on the treatment of glioblastomas, a class of aggressive tumors that attack the braid and spinal cord. These cancers, while rare, are almost always terminal, and CNS is working a new therapy designed to more effectively cross the blood-brain barrier to attack glioblastoma.
Berubicin, CNS’s flagship drug candidate, is an anthracycline, a potent class of chemotherapy drugs derived from the Streptomyces bacteria strains, and used in the treatment of a wide variety of cancers. Berubicin is the first drug in this class to show promise against glioblastoma cancers.
The drug candidate has completed its Phase 1 clinical trial, in which 44% of patients showed a clinical response. This number included one patient who showed a ‘Durable Complete Response,’ defined as a demonstrated lack of detectable cancer.
Following the success of the Phase 1 study, CNS applied for, and received, FDA approval of its Investigational New Drug application. This gives the company the go-ahead to conduct a Phase 2 study on adult patients, an important next step in the development of the drug. CNS plans to start the mid-stage trial in 1Q21.
Based on the potential of the company’s asset in glioblastoma, and with its share price at $2.22, several analysts believe that now is the time to buy.
Among the bulls is Brookline’s 5-star analyst Kumaraguru Raja who takes a bullish stance on CNSP shares.
“Until now, the inability of anthracyclines to cross the blood brain barrier prevented its use for treatment of brain cancers. Berubicin is the first anthracycline to cross the blood-brain barrier in adults and access brain tumors… Berubicin has promising clinical data in a Phase 1 trial in recurrent glioblastoma (rGBM) and has Orphan drug designation for treatment of malignant gliomas from the FDA. We model approval of Berubicin for treatment of recurrent glioblastoma in 2025 based on the Phase 2 data with 55% probability of success for approval. We model peak sales of $533 million in 2032,” Raja opined.
“CNS pipeline also includes WP1244 (novel DNA binding agent) that is 500x more potent than daunorubicin in inhibiting tumor cell proliferation is expected to enter the clinic in 2021… In vivo testing in orthotopic models of brain cancer showed high uptake of WP1244 by brain and subsequent antitumor activity,” the analyst added.
To this end, Raja rates CNSP a Buy, and his $10 price target implies room for a stunning 350% upside potential in the next 12 months. (To watch Raja’s track record, click here)
What does the rest of the Street have to say? 3 Buys and 1 Hold add up to a Strong Buy consensus rating. Given the $8.33 average price target, shares could climb ~275% in the year ahead. (See CNSP stock analysis on TipRanks)
aTyr Pharma (LIFE)
The next stock we’re looking at, aTyr Pharma, has a focus on inflammatory disease. Its leading drug candidate, ATYR1923, is a Neuropilin-2 (NRP2) agonist, working through the receptor proteins expressed by the NRP2 gene. These pathways are important for cardiovascular development and disease, and play a role in the inflammatory lung disease pulmonary sarcoidosis.
In December, the company reported that the drug candidate had completed enrollment of 36 patients in a Phase 1b/2a clinical trial, testing the drug in the treatment of pulmonary sarcoidosis. Results of the current study are expected in 3Q21, and will inform further trials of ATYR1923, including against other forms of inflammatory lung disease.
On a more immediate note, in early January the company announced top-line results of another Phase 2 clinical involving ATRY1923 – this time in the treatment of patients hospitalized with severe respiratory complications from COVID-19. The results were positive, showing that a single dose of ATYR1923 (at 3 mg/kg) resulted in a 5.5-day median recovery time. Overall, of the patients dosed in this manner, 83% saw recovery in less than one week.
Covering LIFE for Roth Capital, 5-star analyst Zegbeh Jallah noted, “We like the risk profile here, with two shots on goal, and updated data details from the COVID study is expected in the coming months. Also announced recently, is that data from aTyr's Pulmonary Sarcoidosis program, will be reported in 3Q21… the success of either of these studies could result in a doubling or more of the market cap as these opportunities appear to barely be accounted for by investors.”
In line with his optimistic approach, Jallah gives LIFE shares a Buy rating and his $15 price target suggests an impressive 277% potential upside for the coming year. (To watch Jallah’s track record, click here)
Other analysts are on the same page. With 2 additional Buy ratings, the word on the Street is that LIFE is a Strong Buy. On top of this, the average price target is $13.33, suggesting robust growth of ~236% from the current price of $3.97. (See LIFE stock analysis on TipRanks)
To find good ideas for penny stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights.
https://finance.yahoo.com/news/2-strong-buy-penny-stocks-165357551.html
Merck Posts 4Q Revenue Growth on Oncology, Vaccine Gains
Merck & Co. Inc. on Thursday logged an adjusted profit in the latest quarter as growth in its oncology and vaccine sales drove higher revenue despite the negative effect of the Covid-19 pandemic on sales.
The Kenilworth, N.J.-based pharmaceutical company logged a fourth-quarter loss of 83 cents a share, compared with earnings of 92 cents a share in the year-ago quarter. The company's net loss was $2.09 billion, a swing from a profit of $2.36 billion in the prior year's fourth quarter.
On an adjusted basis, Merck posted a profit of $1.32 a share. Analysts surveyed by FactSet were forecasting adjusted earnings of $1.38 a share.
Merck's revenue was $12.51 billion, up 5% from $11.87 billion in the fourth quarter of 2019. Analysts were expecting revenue of $12.67 billion.
The pandemic negatively impacted Merck's pharmaceutical revenue by $400 million in the latest quarter, the company said. Social distancing and reduced health-care visits particularly affected sales of vaccines for other diseases, according to the company. The full-year impact to Merck's revenue from the pandemic was about $2.5 billion, the company said.
Overall, pharmaceutical revenue in the quarter grew 8% to $11.4 billion, with growth driven primarily by oncology and vaccine sales.
Animal-health sales grew 4% to $1.2 billion.
The company forecast full-year revenue for 2021 of $51.8 billion to $53.8 billion and adjusted earnings of $6.48 to $6.68 a share.
Analysts had been forecasting revenue of $51.66 million and an adjusted profit of $6.30 a share.
Merck said Thursday that Chief Executive Kenneth C. Frazier will retire at the end of June. He will be succeeded by Robert M. Davis, the current chief financial officer.
Cigna Sees Adjusted Revenue Growth, Pandemic Impact in 2021
Cigna Corp. said Thursday it expects to adjusted revenue growth and a full-year profit in 2021 in guidance that includes a continuing impact from the Covid-19 pandemic.
The Bloomfield, Conn.-based health-care company said its adjusted revenue would be at least $165 billion in 2021, compared with $160.07 billion in 2020.
Its full-year adjusted profit would be at least $20 a share, Cigna forecast. That estimate includes a per-share unfavorable impact from Covid-19 of $1.25, Cigna said.
Analysts surveyed by FactSet had been projecting a full-year adjusted profit of $20.61 a share and revenue of $164.4 billion.
Cigna said its adjusted income attributable to its Evernorth health-services segment would be at least $5.6 billion, with at least $3.8 billion of profit from its U.S. medical division.
Baxter International Turns 4Q Profit
Baxter International Inc. turned a profit for the fourth quarter, thanks to higher advanced-surgery sales that benefited from the acquisition of Seprafilm.
The medical-products company on Thursday posted net income attributable to stockholders of $168 million for the quarter, compared with a loss of $23 million in the year-ago period. Earnings were 33 cents a share, compared with a loss of 5 cents a share.
Adjusted earnings were 80 cents a share. Analysts polled by FactSet were looking for 76 cents a share.
Sales rose to $3.18 billion from $3.04 billion a year earlier, ahead of the $3.12 billion analysts had expected.
Sales in the renal care and clinical nutrition global business units both increased along with advanced surgery, the company said. Those gains helped offset declines in its medication delivery and pharmaceuticals segment, which continued to be hurt by lower rates of hospital admissions due to the Covid-19 pandemic. The company said U.S. hospital admissions fell by low double digits, and that surgical procedures were flat compared with pre-pandemic levels.
EU regulator reviewing Lilly, Regeneron COVID-19 antibody therapies
Europe's drugs regulator said on Thursday it was reviewing data on COVID-19 antibody therapies developed by U.S. drugmakers Eli Lilly and Regeneron for use in some patients.
Two separate reviews of combination treatments by the drugmakers have been started based on trials in COVID-19 patients who do not need oxygen support and are at high risk of their condition worsening, the European Medicines Agency (EMA) said.
Eli Lilly's combination therapy of two antibodies, bamlanivimab and etesevimab, helped cut the risk of hospitalization and death in COVID-19 patients by 70%, data from a late-stage trial showed in January.
Regeneron's cocktail of casirivimab and imdevimab was authorised for emergency use in the United States in November, and was given to former U.S. President Donald Trump during his COVID-19 infection.
The four drugs are combinations of a class of medicines called monoclonal antibody treatments, or manufactured copies of antibodies created by the human body to fight infections.
The EMA also said it was studying the use of Lilly's bamlanivimab as a singular therapy. The drug has already received emergency use approval in high-risk patients in the United States with mild to moderate COVID-19. (https://bit.ly/39NmGP0)
Any recommendations made by the EMA's human medicine's committee will have to be formally approved by the European Commission.
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