Bull or bear market, no investment is a sure thing. Especially in the current financial environment, which remains riddled with uncertainty, finding compelling plays can be challenging for even the most seasoned market watchers. COVID-19 and the lockdowns it triggered have changed the rules of the game, so traditional investing strategies may not be as reliable as they once were. This is where a more comprehensive stock analysis can come in handy.
TipRanks has a tool that does just that. Building on eight key factors like analyst ratings, hedge fund and insider activity as well as fundamentals and technicals, the Smart Score collates all of this data and assigns each stock a score ranging from 1 to 10, that indicates where a particular name might be headed.
Using TipRanks’ database, we found three pharmaceutical stocks boasting a “Perfect 10” Smart Score. Adding to the good news, these Buy-rated tickers offer substantial upside potential and won’t break the bank, with each trading for less than $10 per share.
Fennec Pharmaceuticals (FENC)
First on our list of Perfect 10’s we have Fennec Pharmaceuticals, a biotech company that focuses on the development of its PEDMARK asset, which could potentially prevent ototoxicity from cisplatin in pediatric patients. The company is gearing up for its August 10 PDUFA date, and analysts are betting on a favorable outcome.
Among the bulls is Cantor analyst Charles Duncan. At $9.20, Duncan believes FENC presents an opportunity to get in on the action.
Duncan tells clients that the therapy has already been granted Fast Track and Breakthrough designations for cisplatin-induced hearing loss (CIHL). Cisplatin is an effective chemotherapeutic for various childhood cancers including hepatoblastoma, osteosarcoma, neuroblastoma, brain, CNS and germ cell tumors. However, platinum-based chemotherapeutics like cisplatin can cause ototoxicity.
“CIHL manifests as bilateral sensorineural hearing loss that is often accompanied by tinnitus/vertigo, and may result in significant QoL burden and educational underperformance. Therefore, CHIL has developmental consequences and we believe this is under-appreciated by investors due to limited societal awareness relative to neurodevelopmental disorders like autism,” Duncan said.
Looking at the candidate’s mechanism of action (MoA), STS, Duncan noted, “In two Phase 3 studies of STS administered ~6 hours post cisplatin, a significant reduction in hearing loss was observed with similar reduction in risk, the reproducibility of which enhances our conviction in the program. In the ACCL0431 Phase 3 study, patients receiving STS after cisplatin reduced risk of hearing loss (48%) vs the cisplatin only arm. What we found striking was that patients <5 years of age had a 70% reduction in risk of hearing loss, the group we believe is at highest risk for experiencing neurocognitive and psychosocial delays as these patients are in the early stages of speech development.”
To this end, Duncan rates FENC an Overweight (i.e. Buy) along with an $18 price target. This target suggests shares could soar 96% in the next year. (To watch Duncan’s track record, click here)
It’s not often that the analysts all agree on a stock, so when it does happen, take note. FENC’s Strong Buy consensus rating is based on a unanimous 3 Buys. The stock’s $17 average price target suggests a healthy upside of 85% from current levels. (See FENC stock analysis on TipRanks)
scPharmaceuticals Inc. (SCPH)
Hoping to improve the lives of heart failure patients and reduce healthcare costs, scPharmaceuticals is working on advancing an outpatient therapy to manage diuresis. Currently going for $8 apiece, the share price could present investors with the chance to get in on the action.
Recently, SCPH updated investors on the progress of its planned Furoscix NDA resubmission, which is slated for mid-2020. Critical function reliability testing wrapped up with device validation. This includes shipping, drop and temperature, with excursion testing also almost completed.
Representing H.C. Wainwright, 5-star analyst Douglas Tsao highlights the fact that “initial time points for needed drug stability testing have been successfully completed with just one measurement remaining.” He added, “In December, the company disclosed it successfully completed the needed human factors validation studies, which, in our view, represented the most significant milestone in addressing FDA’s concerns.”
After a PDUFA date is handed out, management will kick off pre-commercial activities. Adapting to the limited face-to-face environment caused by COVID-19, SCPH will use a “coming soon” promotional strategy leveraging digital channels and internet advertising, with a focus on broad promotion for at-home use by patients.
Speaking to the candidate’s potential, Tsao noted, “Management noted it recently completed a market research survey in which respondents unanimously agreed that decreased oral diuretic bioavailability is an impediment to the effective treatment of heart failure (HF), supporting the in use-case for Furoscix.”
Going even further, Tsao points out that COVID-19 has made it essential to keep patients out of the hospital to prevent the more vulnerable from contracting the virus as well as maintain resources. “Furoscix, offers the potential to keep these patients out of hospitals by allowing self-administration of diuretics at home and with ease. The rapid adoption of telemedicine should facilitate use of Furoscix even when Covid-19 subsides since doctor visits can be burdensome for this patient population, especially since they generally need a caregiver to accompany them,” he explained.
Based on all of the above, it’s no wonder Tsao reiterated his Buy recommendation. Along with his bullish call, he bumped up the price target from $13 to $15, implying shares could climb 88% higher in the next twelve months. (To watch Tsao’s track record, click here)
Turning now to the rest of the Street, it has been relatively quiet when it comes to other analyst activity. Only two other ratings were issued recently, a Buy and a Hold, so the consensus rating is a Moderate Buy. With a $13 average price target, the upside potential lands at 63%. (See SCPH stock analysis on TipRanks)
Aptose Biosciences (APTO)
Developing targeted agents, Aptose Biosciences wants to address the unmet clinical need in chronic lymphocytic leukemia (CLL), non-Hodgkin’s lymphoma (NHL), acute myeloid leukemia (AML), myelodysplastic syndrome (MDS) and other hematologic malignancies. Thanks to its promising pipeline and $6.92 share price, some analysts believe that its share price reflects an attractive entry point
Covering the stock for H.C. Wainwright, 5-star analyst Joseph Pantginis cites its CG-806 asset as a key component of his bullish thesis.
On June 12, APTO announced new positive clinical results from its Phase 1 a/b trial evaluating the therapy in patients with relapsed or refractory CLL, small lymphocytic lymphoma (SLL) or NHL. It should be noted that this trial represents the first in human, open-label, single arm, multicenter dose-escalation clinical study testing the safety, tolerability and initial activity of CG-806.
Looking more closely at the results, the candidate was well tolerated, with no serious adverse events witnessed. It also produced lymphocytosis in two CLL patients and delivered complete inhibition of phospho-BTK and multiple oncogenic survival pathways in every patient that received at least 300mg BID. It also completely inhibited phospho-FLT3. For the same dose, steady state PK levels, which are considered to be effective in murine tumor models, were achieved.
Weighing in on this data, Pantginis commented, “We believe the data around CG-806 continue to demonstrate encouraging safety and pharmacologic activity with robust inhibition of several oncogenic driver kinases including 100% of phospho BTK from PBMCs… While it is not known yet how this could translate into better clinical activity, it is encouraging to see such significant multi on-target abrogation phenotype.”
According to Pantginis, the implications go even further. “We believe these data continue to validate the development of CG-806 and support the further dose escalation of the drug… we believe initial response data around CG-806 could be presented at ASH 2020 in multiple indications possibly including r/rAML,” he stated.
As APTO has also already submitted an IND to initiate a parallel Phase 1 a/b clinical study of CG-806 in patients with relapsed or refractory FLT3-mutant or FLT3-wildtype AML, the deal is sealed for Pantginis.
In line with his optimistic take, he rates APTO a Buy rating along with a $9 price target. Should the target be met, a twelve-month gain of 30% could be in store. (To watch Pantginis’ track record, click here)
Looking at the consensus breakdown, other analysts are on the same page. With 7 Buys and no Holds or Sells, the word on the Street is that APTO is a Strong Buy. The $11.29 average price target puts the upside potential at 63%. (See APTO stock-price forecast on TipRanks)
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