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3 Hot Biotech Stocks Set to Explode

Healthcare stocks are booming right now, and top analysts are setting buy recommendations, left and right. Consider that since May, the Health Care Select Sector SPDR ETF (XLV) has climbed a robust 13% in value. It’s a fine summer to be an investor in biotech- a market on the brink of strong rewards when companies hit success.

Here, we turn to TipRanks data to scope out three of today’s interesting biotech contenders. Using TipRanks, we can see current stock insights as well as analysts’ track records- so we know which recommendations to trust. These are the companies Wall Street analysts bet are on the cusp of unleashing at least 15% upside potential.

Let’s dive right in.

Tocagen

Clinical-stage biopharma company Tocagen (TOCA) is focused on developing cancer-selective gene therapy products. Tocagen’s bullish camp just got bigger- and accordingly, shares were on a close to 10% vault Thursday. Even with bulls roaring, the stock is a cheap bet: under $10.

Chardan analyst Gbola Amusa is a top analyst drawn to TOCA’s bullish table, thanks to its “unique” Phase III drug in recurrent high grade glioma (HGG)- the most common and aggressive primary brain cancer.

As such, Amusa- ranked among the best #104 analysts on the Street – initiates a Buy rating on Tocagen stock with a $30 price target (208% upside potential).

For Amusa, it boils down to a compelling “risk-reward proposition” on the TOCA’s pivotal breakthrough designation and PRIME-designated therapy, Toca 511 and Toca FC. (See Gbola Amusa’s other stock recommendations)

Interim data from this cancer-selective gene therapy regiment is anticipated by the opening half of next year. “The initial phase I study (NCT01470794) for Toca 511 & Toca FC produced impressive, and in some cases, durable results in rHGG patients, which otherwise typically see fatality in 8-11 months,” highlights Amusa.

On the back of “robustness of overall datasets so far,” the analyst predicts Toca 511 and Toca FC can realize $877.6 million in 40% risk-adjusted sales in HGGs come 2030.

The biotech player shines as a ‘Strong Buy’ stock pick on the Street. All 3 analysts polled in the last 3 months rate a Buy on TOCA. Massive upside alert: with a $19.83 12-month average price target, analysts see room for the stock to rally a monster 103%. See TOCA Price Target and Analyst Rating Details.

Penumbra

California-based Penumbra (PEN) is a worldwide healthcare company focused on innovative and interventional therapies. Specifically, the neurovascular device maker develops products to help patients suffering from stroke and other neurovascular diseases. In 2018 alone, shares of Penumbra have seen a wild surge of almost 49%- impressive for just the opening half of the year.

Canaccord’s Jason Mills is a top analyst weighing in for the bulls in Penumbra’s corner. Worthy of note, Mills ranks #20 out of over 4,800 analysts we cover on TipRanks- and exhibits an 95% success rate on Penumbra recommendations.

Fresh on the heels with a meeting with PEN management, the analyst reiterates a Buy rating on the stock with a $175 price target. In a nutshell, Mills forecasts room for PEN shares to fly another 26%. (See Jason Mills’ other stock recommendations)

Mills sees promising potential in Penumbra’s newest aspiration system- a catheter which includes three key improvements and upgrades to the company’s own ACE 68 catheter. This is important, as it further sets PEN apart while “differentiating… from the competition in clot aspiration within the acute ischemic stroke market, in our view.”

The upgrade boasts a record high diameter: “JET 7 has the largest internal diameter of any aspiration catheter ever cleared – 0.72 inner diameter compared to PEN’s previous 0.68 catheter (Ace 68) – with JET 7’s larger diameter driving a significant increase in the number of cases in which the entire is able to be aspirated almost immediately (within 1-2 minutes).”

This stock has won a ‘Strong Buy’ consensus rating on Wall Street. Penumbra has received 3 buy ratings over the last three months. With a solid return potential of almost 18%, the stock’s consensus price target rounds out to $163.75. See PEN Price Target and Analyst Rating Details.

Bluebird Bio

Over the last five years, Bluebird bio (BLUE) stock has jumped like a beanstalk in growth: just under 590%. The clinical-stage biotech company is keyed into gene therapy, cancer immunopathy, as well as gene editing to treat cancer and rare diseases.

BLUE’s gene therapy LentiGlobin just won an accelerated assessment of Marketing Authorization Application (MAA) from the European Medicines Agency. The drug has an opportunity to become a one-time treatment addressing the genetic cause of transfusion-dependent β-thalassemia (TDT) in patients with a β0/β0 genotype.

Notably, TDT patients usually need chronic blood transfusions for the rest of their lives to survive- transfusions that bring along severe medical complications. Bluebird’s LentiGlobin stands to cut the call for transfusions- either entirely or at least, meaningfully lessen the dependence.

Gene therapy specialist analyst Raju Prasad at William Blair reiterated confident coverage on BLUE at the start of August. Prasad’s bet: look for 2018 to be a “blue ribbon year” for this soaring biotech.

Prasad maintains an Outperform rating on the biotech player with a $242 fair-value target. In other words, the analyst forecasts a healthy almost 44% upside potential on tap for Bluebird. In addition to late-stage clinical drug LentiGlobin, the analyst likewise is bullish on Lenti-D. (See Raju Prasad’s other stock recommendations)

Short-term, Prasad is upbeat on a slew of catalysts with odds to “enhance the company’s status as a leading innovator.” Specifically, Prasad anticipates a Northstar-2 data read-out at the European Hematology Association yearly meeting; a Phase 2 update on bb2121 at the 2018 American Society of Clinical Oncology; and Northstar-3 data at this year’s American Society of Hematology.

The ’Moderate Buy’ stock has drawn 7 buy ratings from best-performing analysts in three months. Consensus expectations paint a picture of healthy enthusiasm on BLUE’s market prospects. The 12-month average price target stands at $235.60, marking nearly 40% in upside potential ahead. See BLUE Price Target and Analyst Rating Details.

By Julie Lamb for TipRanks

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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