4 Hot Analyst Morning Reads For Wednesday, August 29th

Bret Jensen

People sleep peaceably in their beds at night only because rough men stand ready to do violence on their behalf.” ― George Orwell

The biotech sector managed to consolidate and even add some to its recent gains in trading on Tuesday despite a relatively flat overall market. We had one small acquisition of note yesterday as well. Emergent BioSolutions ([EBS](https://seekingalpha.com/symbol/EBS "Emergent BioSolutions Inc.")) agreed to purchase opioid overdose med NARCAN nasal spray maker Adapt Pharma for up to $735 million. Athenahealth (ATHN) was also the subject of significant buyout speculation as well.

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Before the opening bell, here are four small biotech concerns garnering positive analyst mention today.

Acadia Pharmaceuticals (ACAD), whose stock has been under pressure in recent months gets some love from Cantor Fitzgerald this morning. The analyst firm reissues their Overweight rating and $25 price target with the following commentary

"We reiterate our Overweight rating and 12-month PT of $25, driven by NUPLAZID/pimavanserin in PDP/other indications. For NUPLAZID, while cautious on near-term rev growth (note), we believe new patient adds should resume as an awareness campaign gains traction yet in 2018. Furthermore, based on recent due diligence, we see a broadening clinical evaluation of pima’ as fueling LT growth and believe the PoS for current studies is underappreciated at current trading levels. We recently spoke to management and provide incremental, but key, takeaways below. Closer look – MDD study doesn’t make us depressed.”

Wright Medical Group (WMGI) continues to win analyst accolades this week. This morning BMO Capital upgrades this small cap name to Outperform from Market Perform. Yesteday, Needham upgraded this name to a Buy from a Hold this morning with a $30 price target and the following commentary.

'The share pullback on dilution from the company's acquisition of Cartiva provides a buying opportunity. Matson tells investors in a research note. Needham's analyst believes the deal improves Wright Medical's underlying revenue growth and has confidence that the company can continue to post "beat and raise" quarters.'

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H.C. Wainwright is very active this morning with commentary. Here are a couple of their takes before the bell.

Immune Design (IMDZ) gets reissued with a Buy rating and $11 price target earlier today. Here is the color from that call.

“Valuation and risks to price target achievement. We are instituting a Buy rating and $11 price target. Our valuation is based on our clinical net present value (NPV) model, which allows us to flex multiple assumptions affecting a drug’s potential commercial profile. Our model currently only includes the lead indications for CMB305 for sarcoma (30% contribution) and G100 in follicular NHL (70% contribution). We believe upside potential exists as the company explores additional tumor indications for both lead assets, as well as potential contribution from pipeline development.”

A different analyst at Wainwright likes Sorrento Therapeutics (SRNE). Here is the commentary from that Buy recommendation with a $40 price target

“We ascribe a value of $6.4B based on a sum- of-the-parts approach, or a price per share of $40.00, assuming 159M projected shares outstanding as of end-2Q 2019. The projected share count assumes conversion of all outstanding convertible notes and exercise of all outstanding options and warrants.”

And those are four small cap concerns seeing recent analyst activity before the market opens this Wednesday.

Thank You & Happy Hunting,

Bret Jensen

Founder, The Biotech Forum, The Busted IPO Forum & The Insiders Forum


Hot Analyst Reads