The shortened week started with a major crisis averted for the time being. Over the long weekend, a deal was reached between President Biden and House Majority Leader McCarthy that should help resolve the debt ceiling.
Oppenheimer’s chief investment strategist, John Stoltzfus, expects a positive reaction to the progress being made to close the deal. “In our view, this bodes well for the United States and the markets, although it does not eliminate the potential for short-term angst as the deal heads toward votes in the House and Senate. “, said Stoltzfus.
That elephant in the room aside, plenty of economic data set to be released throughout this week could offer insight into the state of the economy, including nonfarm payrolls and the survey. ISM on manufacturing companies. “These will offer our first indication of the health of the economy in May,” Stoltzfus notes.
In the meantime, we wanted to take a closer look at two stocks that have been applauded by Oppenheimer, with the company’s analysts predicting more than 50% upside potential for each. We ran these tickers through the TipRanks database to get a more complete view of their leads. Here is the truth.
Therapeutic Mirati (MRTX)
We will start with Mirati Therapeutics, a biopharmaceutical company dedicated to developing targeted therapies for cancer patients. Based in San Diego, Calif., this company is focused on developing small molecule drugs that specifically target genetic mutations associated with cancer. The approach is to identify and inhibit key molecular drivers of cancer to disrupt tumor growth and improve patient outcomes.
The goal of any bitoech is to get a drug approved and Mirati recently achieved this feat. Last December, the FDA granted accelerated approval for adagrasib (Krazati) as a second-line treatment for non-small cell lung cancer (NSCLC). In the drug’s first full quarter on the market (1Q23), Krazati generated sales of $6.3 million.
The drug is also being evaluated for other indications. Upcoming catalysts include a reading of updated front-line NSCLC data for the combination of adagrasib with pembrolizumab at 2H23. Mirati is also on track to complete a supplemental new drug application (sNDA) for third-line colorectal cancer and beyond by the end of the year.
Another notable catalyst on the horizon involves MRTX1719, currently being evaluated as a treatment for cancers that have methylthioadenosine phosphorylase (MTAP) suppressed. The first clinical data from the Phase 1/2 clinical study are expected in 2H23.
Just recently, however, Mirati faced a setback with another of her prospective treatments. Last week, the company announced that its lung cancer treatment, sitravatinib, in combination with Bristol-Myers Squibb’s Opdivo, failed to meet the primary endpoint of a Phase 3 trial.
The shares duly fell in the following trading session, but interestingly its failure is seen as a positive by Oppenheimer analyst Jay Olson, who after the reading raised his Perform rating (c i.e. Neutral) to Outperform (i.e. Buy).
Explaining his position, Olson said: “We believe the risk/reward profile of the stock has moved to a more favorable position. We’ve been on the sidelines of this story for a while as we weren’t sure about the clear differentiation of Krazati vs. Lumakras in the context of a growing launch gap and on the pipeline. With expectations on Krazati (especially in 1L) reset and a potential overhang from a late stage program now removed, we believe the stock is poised to outperform with multiple catalysts over the next 12-18 months…”
“We believe SAPPHIRE’s negative results and the removal of sitravatinib make MRTX a much cleaner story for potential M&A at an attractive valuation,” the analyst summed up.
Olson’s price target now stands at $56, which leaves room for 12-month gains of around 51%. (To see Olson’s track record, click here)
The Street’s average price target is a little higher at $61.33, indicating a potential return of 65% over the coming year. Overall, the analyst consensus rates this stock as a moderate buy, based on 8 buys vs. 4 holds. (See MRTX Stock Forecast)
Corbus Pharmaceuticals (CRBP)
We will stay in the biotech space for our next Oppenheimer-backed name. Corbus, a micro-biopharmaceutical company, is dedicated to helping people overcome serious diseases by introducing innovative scientific methods into well-established biological pathways.
In its pipeline, the company focuses on two distinct approaches in oncology. One of its key developments is CRB-701, a clinical-stage Nectin-4 antibody-drug conjugate (ADC) licensed from CSPC Pharmaceutical Group. Currently, a phase 1 dose escalation study is underway in China, evaluating patients with advanced solid tumors. Corbus intends to leverage data from this Phase 1 trial to support a US clinical study, which is expected to begin in mid-2024.
The company is also developing CRB-601, a potent and selective anti-integrin αvβ8 monoclonal antibody to block the activation of latent TGFβ within the tumor microenvironment (TME). Corbus is on track to submit an Investigational New Drug (IND) for CRB-601 in the second half. Recruitment for a phase 1 trial is expected to begin by the end of 2023.
Although it’s still early days for the pipeline, the potential of CRB-701 is what drives Oppenheimer analyst Jeff Jones’ optimistic outlook.
“We believe that ‘701 has the potential for a premium profile compared to SGEN’s PADCEV. ‘701 has the potential for superior safety and tolerability, in part due to proprietary bonding technology. CRBP’s project to use CDx to identify patients and tumors with elevated Nectin-4 expression supports broad applicability and potentially reduces clinical risk,” Jones said.
Jones has high hopes indeed. Along with an outperform (i.e. buy) rating, his $22 price target implies the stock will climb 148% over the one-year period. (To see Jones’ track record, click here)
Micro-cap pharmaceutical stocks don’t always get much analyst attention – they tend to go unnoticed. However, there are two analyst opinions on file here and both are Buy, making the consensus rating a Moderate Buy. CRBP shares are priced at 8.87, with an average price target of $12.50 indicating a trail to around 41% upside. (See CRBP stock forecast)
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Disclaimer: The opinions expressed in this article are solely those of the analysts featured. The Content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.