4 Hot Analyst Reads For Thursday, May 31st

Bret Jensen

The truth will set you free, but first it will piss you off. ― Joe Klaas, Twelve Steps to Happiness

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Belgium based oncology concern Celyad (CYAD) gets a rare 'shout out' from the the analyst community this morning. SunTrust Robinson initiates the name as a new Buy with a $49 price target. Robinson's analyst had this to say about the company's evolving pipeline

"Celyad's approach is differentiated and could work in a broader population by targeting "distress" ligands that an be up-regulated on many cancer cells, the firm says, adding that key catalysts for the stock in the second half of the year include updated Phase 1 data for CYAD-01 in three acute myeloid leukemia trials and updated Phase 1 CYAD-01 data in four colorectal cancer trials".

In late April the company posted some encouraging data around its early stage CAR-T candidate CYAD-01 in patients with treatment-resistant acute myeloid leukemia.

Staying outside the United States, Australian based Mesoblast (MESO) has garnered some positive analyst commentary this week. Yesterday, Cantor Fitzgerald reissued its Overweight rating and $23 price target on MESO. Today, Oppenheimer assigns a new Outpeform rating with a $16 price target. The shares currently trade hands at just under $6.00 a share. Here is what Oppenheimer's analyst had to say about his around the prospects for this 'off the radar' concern

"Wednesday, Mesoblast reported FY3Q18 results and provided a business update. The company could be positioned for its first registrational filing in 3Q, assuming positive 180-day results from the Phase 3 trial of MSC-100-IV in pediatric graft- versus-host disease (GVHD). Nearer term, 100-day survival data from the 60-patient open label trial, expected next month, could bolster the therapy’s chances for FDA approval. While we see the company’s GVHD program as an important validation of its cell therapy platform, we believe the commercial success of Mesoblast hinges on its products for congestive heart failure (CHF) and chronic lower back pain. Management recently addressed a near-term financial overhang with a $75M debt financing, which could potentially extend the company’s cash runway until mid-2019. Reiterate Outperform rating and $16 PT.”

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The company's diverse pipeline is represented by the chart above.

A different analyst at Oppenheimer is positive on Strongbridge Biopharma (SBBP) and assigned a new Buy rating and $12 price target on this small cap rare disease concern late on Wednesday. The analyst provided the following 'color' on the developmental firm.

"Strongbridge is expected to report results from the first of its two Recorlev (levoketoconazole) Phase 3 clinical trials in the next few weeks. We have assigned the SONICS Phase 2/3 clinical trial a 75% probability of success (vs. ~56% for historic endocrine Phase 3 studies) as we think there is a high likelihood that levoketoconazole will show efficacy in Cushing’s syndrome (CS); the key question is how differentiated will its risk/benefit profile be versus historic ketoconazole usage in CS. Our probability of success assessment for the SONICS trial reflects our underlying conviction that levoketoconazole will be differentiated and that this will lead to a probability-weighted 10% to 20% positive stock move on the SONICS readout."

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The company has one product on the market (KEVEYIS) and is preparing for the commercial launch in July of MACRILEN™, the first and only FDA-approved oral drug indicated for the diagnosis of Adult Growth Hormone Deficiency. The company raised revenue guidance for KEVEYIS after its first quarter results recently.

Finally, mid-cap oncology concern Incyte (INCY) gets assumed with an Overweight rating late Wednesday with a $85 price target over at Piper Jaffray which had the following to say about the company going forward

"we expect Jakafi to produce durable, high-margin revenues approaching $2.5-$3B over the next ten years and believe Incyte and partnerLilly (LLY)will receive an approval for baricitinib next week"

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The stock does seem to be trying to put in a bottom over the past few weeks after a long, slow decline over the previous eight months.

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Hot Analyst Reads