Politics: private interests masquerading as public concerns. ― Marty Rubin
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Here are four small cap biotech stocks garnering positive analyst commentary over the past 24 hours just before the first trading day of June opens. Two of these seem to be getting some comments around their attractiveness as possible buyout candidates.
H.C. Wainwright raised their price target for Viking Therapeutics (VKTX) to $15 from $11 previously this morning. Wainwright's analyst states the data yesterday from Madrigal Pharmaceuticals (MDGL) validates the thyroid receptor beta approach and derisks Viking's drug candidate 'VK2809' upcoming Phase 2 outcome. Both stocks had 'Yuge' days in the market yesterday as you can see from the charts above and below. We told you about the potential of Viking from our Busted IPO Forum feed in October when it trading at ~$2.50 a share. The stock has quadrupled from there but seems to still have potential upside.
Analysts also seem to think Madigral still has upside as well even after its almost 150% rally in trading Thursday to close out May. Roth Capital raises its price target to $400 from $210 previously early today on yesterday's stellar mid-stage trial results for NASH and believes Madrigal could fetch ~$5.6 billion in a buyout. Yesterday Oppenheimer upgraded the shares to Outperform and Cowen & Co. assigned a new Buy rating on the stock. JMP Securities and Evercore ISI also reissued their Buy ratings with $300 price targets Thursday. All in all, a lot of love for this potential NASH concern.
T2 Biosystems (TTOO) continues to benefit from the FDA approval of its bacteria panel on Wednesday. Leerink Swann upgrades the name to a Buy and raises its price target to $12 from $5 previously this morning. Swann's analyst provided the following color behind his positive view on the stock
"This week's T2bacteria FDA clearance expands the company's market opportunity "dramatically" from $1.4B to over $3B. T2 is "highly underpenetrated" in its core markets, but feels it can now penetrate the broader $1.5B-$2.0B bacterial sepsis market with an immediate entry into the hospital emergency departments, which the analyst values at $300M"
This is another 'Busted IPO' that has done extremely well lately and is a founding member of the Busted IPO Forum model portfolio that launched last September to take advantage of this lucrative niche of the market. We loved TTOO given the game changing potential of this game changing panel that will dramatically cut the time to identify and treat sepsis which kills almost 100,000 individuals in the United States annually. We are currently running 14 day free trials on that service, to initiate your risk-free two-week trial just click here.
Finally, RBC Capital came out with some very interesting commentary on Alder Biopharmaceuticals (ALDR) late yesterday. The analyst firm maintained their Outperform rating and $24 price target on this small cap concern, but their commentary could spike some takeover speculation in today's trading. I paraphrase RBC's take on Alder below
BothAllergan (AGN)andBiogen (BIIB)have been viewed as companies that could potentially be interested in acquiring or partnering with Alder Biopharmaceuticals and makes the case that developments in the past day or so for both of those large-cap drugmakers are indirectly positive for Alder. In terms of Allergan, the company stated that it plans to keep a primary care infrastructure to sell CGRPs and other CNS products maintains the likelihood they might have interest in Alder's eptinezumab either as an acquisition or in a partnership. In terms of Biogen, the company's hiring of a leader for a newly-created corporate development function who has extensive experience in business development potentially lays the groundwork for them to explore assets such as eptinezumab.
And those are four small cap biotech stocks that could be on the move early in June on positive analyst commentary.
Highly Recommended: Many of these stocks covered in our '4 Hot Analyst Reads' every morning make ideal Buy-Write candidates. For those that want to learn about more advanced option strategies to put in their investor 'toolbox', I highly recommend the free 30-minute report and 7 minute video my Investors Alley's colleague Jay Soloff has put together. Jay has been teaching about and using option strategies successfully for two decades. The free video and report can be downloaded HERE