Investors are always on the lookout for the best returns, and looking for stocks with capacity for great benefit. Initially glance, biotech stocks would not appear to be great prospects for success– they come along with high overheads and costly item research, and long preparations before taking anything to market. However that hasn’t stopped investors from putting money into highly speculative biotech companies.
The keys here are a determination to take on some risk, and an understanding that success will be based not on traditional factors like revenues and sales metrics however on clinical trial outcomes and governmental regulatory choices. Investors in biotech stocks require to discover targets with positive drivers on the near- to mid-term horizon, including promising drug prospects and/or unique techniques to unmet medical needs. Discover these, invest patiently, and wait– the upside capacity is frequently tremendous.
Using the TipRanks platform, we’ve discovered 2 clinical-stage biotech companies which fit that profile. Let’s take a look at their details, along with recent commentary from Wall Street’s experts.
Viracta Therapies (VIRX).
We’ll begin with Viracta, a scientific stage biotech company concentrated on the treatment of Epstein-Barr related cancers. E-B is one of the most common infection infections found in humans; it becomes part of the herpes household of viruses, is called the reason for infectious mono– and has been reliably linked to a series of cancers, consisting of numerous lymphomas, and stomach and nasopharyngeal cancers. Quotes are that 90% or more of the world population carries the infection, and it leads to more than 250,000 viral-related cancers every year. Clearly, discovering a targeted treatment for cancers caused by an almost ubiquitous viral infection will have a strong influence on public health.
Viracta has one drug prospect in its research study program, nanatinostat. This prospect has actually been granted a Fast lane Classification by the FDA for usage in combination with the anti-viral drug valganciclovir as a treatment for EBV+ lymphoid malignancies. In combination, nanatinostat targets the viral genome and causes a particular genetic expression; the anti-viral then interrupts the DNA duplication cycle and eliminates the growth. Results in Stage 1b/2 medical trials were favorable, and a further medical trial, the NAVAL-1 pivotal trial, is planned for later this year.
In addition to the Fast lane Classification, the nanatinostat/valganciclovir mix has actually also gotten Orphan Drug Designations in the treatment of T-cell lymphoma, plasmablastic lymphoma, and post-transplant lymphoproliferative disorder. These programs are still in pre-clinical research phases, with a Stage 1b/2 medical study set up for 2H21.
Previously this year, Viracta completed a merger with Sunesis Pharmaceuticals, an all-stock offer that ended with Viracta shareholders owning 86% of the combined company, with 14% going to Sunesis investors. The merger will allow the combined business to focus on Viracta’s advancement pipeline– and it put the VIRX ticker on the NASDAQ. VIRX held over $120 million in money and cash equivalents as of the merger closure on February 24.
Throughout the merger, Viracta gained ownership of two clinical-stage drugs in Sunesis’ pipeline. On March 23, Viracta revealed that it had reached an arrangement with XOMA by which XOMA purchased the future milestones and royalties of the Sunesis candidates. The purchase consisted of an up-front payment of $13.5 million, along with as much as $20 million in future payments based on a pre-commercialization, event-based turning point. The sale to XOMA permits Viracta to concentrate on the EBV+ nanatinostat pipeline.
In a recent report on Viracta, Leerink analyst Andrew Berens stated, “We think the drug will carve a specific niche in later lines of therapy, eventually moving previously as doctors gain experience with the drug and company produces additional data. Could see some usage in patients who are not able to get full intensity requirement of care due to the fact that of EBV infection.”.
In a key point, the analyst includes, “This supplies the business with several shots on objective, considered that the critical NAVAL-1 trial, set to initiate in 2Q21, will simultaneously assess a variety of mates.”.
Berens started protection with a Buy rating and an $18 rate target, recommending space for an 82% 1 year advantage. (To watch Berens’ track record, click on this link.).
There are 3 evaluations on apply for this ticker, and they are consentaneous– all recommend to Buy this stock. This clear positive outlook gives VIRX a Strong Buy analyst consensus rating. The shares are costing $9.89, and their $33 typical cost target suggests a benefit of 234%. (See Viracta’s stock analysis at TipRanks.).
Akouos, Inc. (AKUS).
The next stock we’re taking a look at, Akouos, uses financiers a chance to really get in on the ground flooring. This company’s work is still at the pre-clinical stage– however it offers a lot of capacity. Akouos has locked onto the truth that a lot of hearing conditions are genetically based, and that existing treatment is dependent on hearings aids and cochlear implants. The business is searching for a different approach, one not based upon mechanical support. Akouos is establishing a series of targeted adeno-associated viral (AAV) vector-based gene therapies for hearing loss.
That unique technique, if effective, will use hearing loss patients a less intrusive path for treatment. The AAV method intends to put corrected copies of the affected genes straight into the inner ear, permitting the body to heal itself and restore hearing. This is a genuinely novel approach to the problem, and the work is still in its early phases. Akouos has 6 item candidates, at various levels of preclinical testing.
Previously this month, Akouos revealed an essential milestone in its AK-OTOF program. The drug candidate was granted both Orphan Drug Classification and Rare Pediatric Disease Designation by the FDA. These designations open pathways for faster regulative review, in addition to funding support. Akouos plans to submit its investigational brand-new drug application (IND) for AK-OTOF in 1H22.
On the business end, Akouos completed 2020 with over $308 million in money on hand, and in February the company raised $105 million in gross proceeds from a Series B financing round. This comes after last summer’s IPO, kept in June, in which the business put 14.375 million shares on the public market at $17 each. The IPO raised $244.4 million prior to expenditures.
These recent money infusions bode well for Akouos’ capability to preserve its research programs; the company’s cash position has actually enhanced dramatically since December 2019, when it had just $25.1 million readily available.
5-star analyst Joseph Pantginis, of H.C. Wainwright, started protection of this stock recently. Keeping in mind the company’s unique technique to a severe problem, he writes, “Akouos’ approach is assuring in our belief, as it leverages artificial AAV versions (referred to as ancestral AAV or AAVAnc) to offer the appropriate missing gene to the entire sensory epithelium in the inner ear with high efficiency. Significantly, the therapy is paired with an unique, minimally invasive surgical delivery technique which conquers the typical restrictions connected with reaching the inner ear.”.
At the bottom line, Pantginis offers a bullish outlook: “We predict Akouos emerging as a crucial player in the area. We see the business’s clear focus and ingenious method as highly competitive in the existing landscape of hearing loss disorders.”.
The analyst started a Buy rating on AKUS, and his $25 rate target shows room for 57% share growth in the next 12 months. (To see Pantginis’ track record, click on this link.).
Akouos has actually remained in the general public markets for just 10 months, and in that time has gotten 5 expert reviews. These break down 4 to 1 favoring the Buys against the Hold, and give the stock its Strong Buy agreement ranking. AKUS is trading for $15.96, with a $30 average rate target suggesting a 1 year advantage capacity of 88% from that level. (See Akouos’ stock analysis at TipRanks.).
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Disclaimer: The opinions revealed in this post are exclusively those of the included experts. The material is meant to be used for informative purposes only. It is very essential to do your own analysis prior to making any financial investment.