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Three major biotechnology stocks with major catalysts approaching
Investors are always looking for the best opportunities in the stock market. One of the most sought after locations for disproportionate returns is the biotechnology sector. These companies, as well as investors, are also looking; to find medical solutions when needed. When someone reaches medical gold, the rewards can be phenomenal for early investors who quickly recognized the potential. However, where space offers a beautiful reward, it is fraught with risks. If a company fails to meet the requirements to bring treatment to the market, the implications can be brutal for the shares and, therefore, for the investors’ pockets. After clinical trials are completed, the last hurdle for approval of a drug is a meeting with regulators. The dates of the PDUFA (Prescription Drug User Fee Act) – the deadline for the FDA’s review of new drugs – determine whether a treatment is appropriate or not and a yay or not can act as a major catalyst to send stocks both up and down fall. With that in mind, we opened the TipRanks database to obtain information on three biotechnology actions that await the PDUFA dates. All are currently classified as Buy, with Street analysts predicting strong gains next year. Cormedix (CRMD) We will start with Cormedix, a biopharmaceutical company specializing in the field of infectious and inflammatory diseases, whose PDUFA date is fast approaching. Cormedix’s only focus at the moment is Defencath, a broad-spectrum antimicrobial and antifungal, and on February 28 the FDA will decide whether to cut the mustard. The company has developed the treatment to prevent catheter-related bloodstream infections (“CRBSIs”) in patients with end-stage kidney disease undergoing hemodialysis using a central venous catheter. Defencath is already on the market in Europe and other regions under the Neutrolin brand. B. Riley analyst Andrew D’Silva believes that the FDA’s recent actions bode well for the drug’s chances of approval. “CRMD received a priority review for the candidate, which reduced the review time for FDA submission from ~ 10 months to ~ 6 months, and the FDA later determined that an AdCom meeting was not necessary. As a result, we are increasing the likelihood of success related to an FDA approval of 70% to 85%, which is in line with the typical approval rates seen for applicants after an NDA / BLA has been submitted, “commented D’Silva. Taking into account the results of the candidate’s Phase 3 study, in which treatment showed a statistically significant 71% drop in CRBSI in hemodialysis patients compared to heparin, D’Silva believes that Defencath could save the health system about $ 1 billion a year. This without taking into account the “benefits related to the reduction of the use of antibiotics, improvement of the quality of life, reduction of the mortality or willingness to pay (DDP) per year of life adjusted for the quality (QALY) gained”. D’Silva’s calculations lead him to believe that TAM (total addressable market) for Cormedix hemodialysis is around US $ 1.7 billion. In line with its optimistic approach, D’Silva classifies CRMD as Outperform (ie, purchase), along with a target price of $ 25. If your thesis is successful, a potential gain of 75% may be right. (To see D’Silva’s history, click here) In general, CRMD’s shares received unanimous approval, with 4 purchases supporting the rating of the strong stock purchase consensus. The shares sell for $ 14.30, and the average target price of $ 22 suggests an upward potential of ~ 54% from that level. (See CRMD stock analysis at TipRanks) Kiniksa Pharmaceuticals (KNSA) Next up is Kiniksa Pharmaceuticals and, unlike Cormedix, the company has a varied pipeline of drugs at different stages of progress – all with a focus on weakening diseases with significant unmet medical needs. The next catalyst for Kiniksa is March 21 PDUFA for rilonacept, for the treatment of recurrent pericarditis (RP), an agonizing and debilitating autoinflammatory cardiovascular disease. The FDA has granted both orphan drug and innovative therapy status for treatment that showed positive first-line results in the Phase 3 study. With nearly 40,000 patients with RP in the U.S. looking for or undergoing medical treatment, Kiniksa’s focus is on bringing it to market a treatment that not only addresses the symptoms of recurrence of pericarditis, but also reduces the likelihood of future recurrences. Among the fans is Wedbush analyst David Nierengarten, who believes the company has the right approach. “We believe that the commercial message is solid and straightforward: in addition to the impressive first-line effectiveness, the main secondary outcomes of quality of life reported by the patient and reduction of the basic medication support its use,” said the 5-star analyst. The analyst added: “In all, we see KNSA’s rational marketing strategy for rilo as encouraging and we hope the program will be well received by cardiologists who treat a disproportionate number of patients with recurrent pericarditis and by patients due to the rapid onset of convincing benefits. . ” Based on all of the above, Nierengarten classifies KNSA as Outperform (that is, Purchase), along with a target price of $ 35. This target puts the upside potential at 55%. (To see Nierengarten’s history, click here) Other analysts share a similar enthusiasm with Nierengarten when it comes to KNSA. As 3 purchase ratings have been assigned in the last three months compared to no waiting or selling, the consensus is unanimous: the action is a ‘strong buy’. Meanwhile, its average price target of $ 31.67 puts the potential 12-month gain at ~ 40%. (See KNSA stock analysis at TipRanks) Aveo Pharmaceuticals (AVEO) In the hope of providing better results for patients, AVEO Pharmaceuticals advances drugs targeted at oncology and other unmet medical needs. The company has several drugs under development, but the focus is now on the FDA’s decision for Tivozanib, the company’s drug for the treatment of third and fourth line of advanced renal cell carcinoma (RCC). The drug is already approved to treat adult patients with advanced renal cell carcinoma (RCC) in other regions, specifically in the European Union, Norway, New Zealand and Iceland. The PDUFA date is set for March 31 and, after positive data from the final stage study, Baird analyst Michael Ulz believes that a successful outcome is in the plans. “Tivozanib has been shown to significantly increase the time adjusted for quality without symptoms or toxicity (Q-TWiST) compared to sorafenib (15.04 vs. 12.78 months; p = 0.0493), further highlighting a profile of differentiated tolerability based on a quality of life measure for tivozanib, despite similar overall survival results (OS) … We continue to see potential for approval based on the TIVO-3 study and we expect the investor focus to remain on next PDUFA date (March 31), which we see as the next key catalyst, “Ulz said. To that end, Ulz evaluates AVEO as a Buy along with a target price of $ 17. The implication for investors ? Up 106%. (To see Ulz’s history, click here) It has been relatively quiet when it comes to other analyst activity. In the last three months, only 2 analysts have issued ratings, however, as both were purchases, used to say is that AVEO is a moderate purchase. Based on the average price target of $ 13.50, shares could rise ~ 64% more in the next twelve months. (See AVEO’s stock analysis on TipRanks) To find good ideas for trading biotechnology stocks with attractive valuations, visit TipRanks ‘Best Stocks to Buy, a newly launched tool that brings together all of TipRanks’ stock perceptions. Disclaimer: The opinions expressed in this article are exclusively those of the analysts presented. The content should be used for informational purposes only. It is very important to do your own analysis before making any investments.