4 Hot Analyst Reads For Wednesday, May 16th

Bret Jensen

Be like a duck, paddling and working very hard inside the water, but what everyone sees is a smiling and calm face.” ― Manoj Arora

Here is a synopsis of recent analyst activity that could move the following small cap biotech stocks in trading this week.

B Riley FBR initiatesTocagen(TOCA) with a new Buy rating and $15 price target. We just covered this intriguing ‘Tier 4’ name here on The Biotech Nation last week. Riley’s analyst believed recent “ breakthrough data de-risk the company's Phase III brain cancer viral therapy". It is the first analyst activity I can find on this stock since Stifel Nicolaus reiterated its Buy rating and $24 price target on TOCA on July 25th of last year. I have a small position in this name via a Buy-Write order. The company recently filed a $100 million mixed shelf offering. If the company does a forthcoming capital raise and the shares dip, I may add to my holdings.

A couple of analyst firms get positive on Petiq (PETQ). Jefferies reissued its Buy rating and $30 price target on this animal health play after its posted first quarter results. This morning Oppenheimer assigns a new Buy rating and $28 price target with the following commentary

Yesterday, after the market close, Outperform-rated PetIQ (PETQ) reported Q1 (Mar.) results and reiterated 2018 financial guidance. PETQ has turned quite controversial as a group of rather vocal investors have expressed loudly concerns over the company’s business model and controls. We studied closely last night’s release and chatted extensively with PetIQ senior management. We come away increasingly upbea‎t toward prospects for the company and its shares, and incrementally encouraged that not only is the PETQ business model taking shape, but senior leadership is committed to better articulating the nuances of the enterprise to the market. Market sentiment is apt to continue to drive PETQ shares near term. Longer term, we look toward still unfolding and potentially superior sales and EPS power as the key determinants of shares"

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Source: Company Presentation

Given today's buyout of Abaxis (ABAX) by Zoetis (ZTS) this morning for some $2 billion, this fast growing pet medicine concern might see some takeout speculation as well.

Wells Fargo initiatesuniQure (QURE) with an Outperform rating this morning with a $47 price target. Its analyst says the following about the prospects of this gene therapy concern based in the Netherlands

UniQure's Adeno-associated virus serotype 5 could be a best-in-class AAV vector for the delivery of liver-based gene therapies. In addition to lead gene therapy candidate Padua variant transgene AMT-061 for hemophilia B, uniQure's pipeline offers "significant option value," including programs in Huntington's and genetically driven heart disease."

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Source: Company Presentation

As one can see from the chart above, the company has several 'shots on goal' with definable milestones on the horizon.

Finally, Citigroup upgradesAlkermes (ALKS) to a Buy from Neutral and places a $62 price target on the Irish based biopharma after doing a physician survey and 'deep dive' which led to increased "conviction around the ALKS 3831 value proposition". Further Citi's analyst views "Alkermes' valuation as compelling and is positive on the company's "pipeline optionality and near-term catalyst flow." ALKS 3831 is a once-daily, oral atypical antipsychotic drug candidate for the treatment of schizophrenia. Phase 3 trial data for that indication should be out in the fourth quarter of this year.

And those are some 'hot' analyst reads before the market opens this Wednesday, May 16th.

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Hot Analyst Reads