Stock Analysis & Ideas

BrainStorm’s (BCLI) COVID-19 Program Could Drive More Upside, Says 5-Star Analyst

No doubt, 2020 has been the year of COVID-19. However, in tandem, it has also been the year of the biotech, or more precisely, the coronavirus-related biotech. The frantic global search for COVID-19 solutions has shone the spotlight on previously under-the-radar companies making an effort to extinguish the viral outbreak.

You can now add BrainStorm Cell Therapeutics (BCLI) to the list. Shares are up by 252% year-to-date. Although to be fair, the neurodegenerative disease-focused biotech was already on the up before joining the fray. However, with the recent entrance into the COVID-19 arena, Maxim analyst Jason McCarthy believes BrainStorm will make a mark in an increasingly crowded space.

McCarthy has a Buy rating on BCLI to accompany a $20 price target. Expect upside of 30% from current levels, should McCarthy’s thesis play out in the year ahead. (To watch McCarthy’s track record, click here)

So, what’s all the fuss about? Last week, BrainStorm released promising clinical data for its NurOwn-derived exosome platform as a COVID-19 treatment.

In a study of mice with lipopolysaccharide (LPS)-induced acute respiratory distress syndrome (ARDS), the administration of NurOwn-derived exosomes resulted in a statistically notable improvement in various lung parameters. Because of their ability to penetrate deep tissues, mesenchymal stem cell-derived exosomes have been examined as a potential therapy for Acute Respiratory Distress Syndrome (ARDS).

For McCarthy, the results compare to those of other players currently evaluating the use of stem cell-based therapies for treating ARDS in COVID-19.

McCarthy explained, “Stem cells, long before COVID, have demonstrated efficacy in ARDS settings. Also in the space is Mesoblast, Pluristem, and Capricor, each of which have demonstrated efficacy in severe COVID patients. Overall, while each cell therapies or exosome therapies derived from the cells is unique (not all stem cells are the same), each is validating of the other and the other and so on; positive for BCLI in our view.”

Before COVID-19, the biotech’s focus had been on applying its proprietary autologous cellular technology platform, NurOwn, to neurodegenerative disorders.

In addition to an upcoming pivotal data readout for the Phase 3 clinical trial of autologous MSC-NTF cellular therapy in Amyotrophic Lateral Sclerosis (ALS), BrainStorm also has other programs for NurOwn in multiple sclerosis (MS) and Alzheimer’s disease in progress. McCarthy expects the expansion into COVID-19 to be constructive for the stock in the coming months.

“We view this as a positive for the company and its investors as we have seen significant rises in valuations for cell therapy groups in this space; BCLI is poised to follow,” the 5-star analyst concluded.

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