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The bottom is for these 2 actions? Analysts say ‘buy’
Today we take a look at two small-cap biotech companies whose stocks have hit a rut. Every company has experienced a recent clinical setback that has caused the stock price to fall, erasing previous gains and sending it back to low levels. Setbacks like this are not uncommon in the biotech industry and highlight the risk and speculative nature of the industry. So what should investors do when a stock crashes? Is it a question of bad fundamentals? And has the share price still found its low point? This is where the pros of Wall Street come in. Noting that each is about to start again on an upward trajectory, some 5-star analysts see an interesting entry point for both. Using the TipRanks database, we discovered that these two tickers have moderate to strong buy consensus ratings from the analyst community and have strong upside potential. Cortexyme, Inc. (CRTX) The first shot down name we’re looking for is Cortexyme, a clinical-stage biopharmaceutical company focused on degenerative diseases, particularly Alzheimer’s disease. The company’s lead candidate is COR388, also known as atuzaginstat. Atuzaginstat is currently being investigated as part of the GAIN trial, a study of its effectiveness against Alzheimer’s disease. The trial is fully recruited, with 643 patients, and the company was moving towards an open-label recruiting (OLE) section of the phase 2/3 study. In a routine regulatory update, Cortexyme announced that the OLE phase will be discontinued, although the primary GAIN study is continuing, with results to be released in the fourth quarter of 2021. The announcement of the partial discontinuation has caused a 35% drop in the share price. The partial suspension was caused by adverse liver events during the atuzaginstat trial. The liver symptoms were reversible and showed no long-term lasting effects. The FDA reviewed these records and, in conjunction with Cortexyme, the decision was made to hold OLE while suing GAIN. This decision allows the main focus of the program to continue, while developing a new protocol for the OLE. The purpose of OLE is to test the long-term efficacy and tolerability of the drug. In a review of Cortexyme after the announcement, HC Wainwright 5-star analyst Andrew Fein noted, “Cortexyme’s announcement of a partial clinical suspension of the atuzaginstat OLE study is disappointing, but the reversible nature of liver toxicity could provide some silver lining for Cortexyme. We believe that the continuation of the pivotal trial suggests that the drug-induced liver injury may not be severe enough to interrupt the program. Regarding the short term, Fein adds: “The continuation of the GAIN trial is encouraging despite the partial maintenance of OLE. This suggests that the FDA plans to wait for additional data from the pivotal trial before reaching a conclusion. Management said nearly a third of patients with GAIN had completed the study and exceeded the 12-week deadline, suggesting they are out of risk. To that end, Fein is pricing CRTX a buy, and its price target of $ 76 indicates confidence in 147% growth potential. (To see Fein’s track record, click here) Overall, Cortexyme has a moderate buy rating by analyst consensus, with 6 recent reviews ranging from 4 to 1 to 1, buy-keep-sell. The average share price target of $ 83.60 suggests that Wall Street sees high potential, in the range of ~ 170% up from the trading price of $ 30.74. (See CRTX stock market review on TipRanks) Immunovant (IMVT) Next, Immunovant, a clinical-stage biopharmaceutical research company, is focused on developing treatments for patients with autoimmune diseases, a class of diseases in which the immune system attacks the patient’s own body. The company’s lead drug candidate, IMVT-1401, is currently in trials for the treatment of ocular thyroid, myasthenia gravis and warm autoimmune hemolytic anemia. The drug is described as “a novel fully human anti-FcRn monoclonal antibody”, administered by subcutaneous injection. On February 2, Immunovant’s stock plunged 42%, and has been declining since. The triggering factor was an announcement by the company that IMVT-1401 has had its Phase 2b clinical trial for thyroid disease suspended temporarily due to patients experiencing dangerous increases in their LDL levels. LDL is the potentially harmful form of cholesterol, which has been linked to cardiovascular disease. Despite the clinical setback, Stiffel 5-star analyst Derek Archila reiterated a buy rating on IMVT shares, along with a price target of $ 28. This figure suggests a potential increase of 52% from current levels. (To view Archila’s history, click here) “Interestingly, increases have only been seen in PDD patients, and our review of the literature suggests a few things: (1) it is likely that this is specific to TED given the biology – see below for more details, but we do not believe that similar increases in LDL will be seen in other indications outside of TED; and (2) other anti-thyroid therapies used in Graves / TED also see similar increases in LDL, which end up being transient. We believe that IMVT-1401, inside, reproduces this mechanism, ”noted the analyst. Archila summed up: “While we have to see additional data from the company to confirm … we don’t think this program is dead. Overall, Strong Buy analyst consensus opinion on IMVT suggests that Wall Street generally agrees with Archila’s assessment. This rating is drawn from 8 recent reviews, including 7 purchases and only one expectation. . The average price target here is $ 40.38, which implies an increase of around 121% for the next 12 months. (See IMVT stock analysis on TipRanks) To find good ideas for stocks traded at attractive valuations, visit the best stocks to buy from TipRanks, a newly launched tool that brings together all information about TipRanks stocks. Disclaimer: The opinions expressed in this article are solely those of the featured analysts. The content is intended to be used for informational purposes only.It is very important to do your own analysis before making any investment.
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