The market might be exhibiting undeniable bearish trends all year, but there are always exceptions to the rule. One such name that has been defying the downward pull is Veru (VERU). The shares have added 140% year-to-date with the past week providing the latest leg up.
Investors have been getting behind the potential of the company’s Covid-19 treatment, sabizabulin; and last week, data published in the New England Journal of Medicine (NEJM) showed decidedly positive results from a phase 3 clinical study of the drug.
Patients who received sabizabulin as opposed to a placebo showed a 55.2% relative decrease in mortality, a 26% relative decrease in hospital days, and a 43% relative decrease in intensive care unit days. Additionally, the adverse effect profile of the drug was determined to be adequate, supporting the findings from earlier clinical trials.
That said, following the data’s release, short-seller Culper Research had a bone to pick with the results, claiming that at trial entry, there was an imbalance in oxygenation status, which gave an advantage to the sabizabulin group vs. the placebo cohort.
However, Oppenheimer analyst Leland Gershell believes that is not the case, and in fact, believes the peer-reviewed report “leaves little doubt… that the drug will be granted EUA by the FDA.”
Expecting a positive outcome will “trigger substantial upside,” Gershell considers Veru a “top pick.” Overall, the analyst rates the stock an Outperform (i.e., Buy) with a $36 price target. If everything goes as planned, Veru will soar about 155% over the next 12 months. (To watch Gershell’s track record, click here)
Echoing Gershell’s bullish views is Jefferies analyst Chris Howerton who expects “investor scepticism” to be put to rest following the results’ publication.
“The Ph3 CV19 results for sabizabulin published addressed most concerns, in our view. Specifically: 1) patients enrolled are in fact sicker and support the higher mortality observed; 2) there was no meaningful impact of region on outcomes; and 3) baseline demographics (SoC received, BMI, etc.) were well-balanced across arms, we see the publication as further derisking of the CV19 opportunity,” Howerton explained.
Bottom line, if you think you’ve missed the gains in Veru, think again. Howerton rates the stock a Buy, backed by a $55 price target. This target suggests the stock will be changing hands for ~296% premium a year from now. (To watch Howerton’s track record, click here)
Last but not least is H.C. Wainwright analyst Yi Chen who highlights sabizabulin’s USP (unique selling point). He writes, “We note that none of the current FDA-approved or -authorized therapeutics for COVID-19 in the hospital setting can achieve over 50% relative reduction in deaths. Therefore, sabizabulin has the potential to become the new standard of care for hospitalized moderate-severe COVID-19 patients if its EUA application is granted, in our view.”
And what about the rest of the Street? Other analysts are just as confident; all 5 recent reviews are positive, making the consensus view here a Strong Buy. Shares are expected to climb 104% higher over the coming months, considering the average target stands at $28.75. (See Veru stock forecast on TipRanks)
To find good ideas for stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights.
Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
