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3 Top Biotech Stocks with FDA Approvals on the Horizon

3 Top Biotech Stocks with FDA Approvals on the Horizon

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COVID-19 has turned the world upside down, but the market’s most recent surge has Wall Street observers wondering if the situation is on the mend. Rallying on April 17 thanks to encouraging data from Gilead's remdesivir COVID-19 drug trial and the government’s stimulus measures, the three major U.S. stock indexes rounded out the week in the green. With some investors now looking to take on a bit more risk, they are turning to the ultimate risk/reward plays: biotech stocks.  

Biotech companies are unique in that only a few key indicators like positive data or regulatory approvals can signal they are well on their way to generating sustainable revenue. As a result, an update on the progression of a candidate can act as a catalyst for shares, instantly propelling them in either direction. Thus, the returns can be massive, but so can the losses. 

Taking all of this into consideration, we used TipRanks’ database to get the full scoop on three compelling biotech stocks with upcoming Prescription Drug User Fee Act (PDUFA) dates, the deadline by which the FDA must decide to approve or reject a new drug application. According to the investing platform, each ticker has received enough praise from Wall Street analysts to earn a “Strong Buy” consensus rating. Not to mention there's hefty upside potential for each. Let’s jump right in.  

Evofem Biosciences Inc. (EVFM) 

Evofem has been at the forefront when it comes to women’s reproductive health, with it hoping to improve the lives of women throughout the world. The company is gearing up for its Phexxi product’s May 25 PDUFA date, and analysts are betting on a favorable outcome. 

Weighing in for Cantor Fitzgerald, analyst Louise Chen calls Phexxi, its Multipurpose Vaginal pH Regulator (MVP-R) that keeps vaginal pH within the normal range of 3.5 to 4.5 even in the presence of semen to prevent pregnancy, an “innovative, first-in-class product”, and thus expects it to ultimately get a thumbs up. She estimates that even if only 885,000 women out of the 17 million who want or need a non-hormonal contraceptive get a prescription for the candidate, sales could reach $1 billion. 

Chen added, “We think women will choose Phexxi over other methods of birth control because: 1) she does not need to be tethered to a regimen/ device, men have had condoms since the 1800s, 2) studies show that Phexxi enhances sexual pleasure while hormonal birth control diminishes it. After only one use, women reported a 2.7x improvement in their sexual experience.” 

That being said, Chen sees an even larger opportunity for its EVO100 candidate in STI prevention, thanks to the large unmet need. Citing the Phase 2b study results, the analyst noted, “There was a 50% relative risk reduction for chlamydia and 78% relative risk reduction for gonorrhea. EVO100 was granted Fast Track designation for prevention of chlamydia in women and QIDP designation for prevention of gonorrhea. EVFM expects potential U.S. approval for EVO100 in 2022. We would also note that this is the fifth year in a row that chlamydia and gonorrhea are on the rise.” 

Given that Chen also believes the Street has undervalued the opportunity for potential OUS partnerships, it should come as no surprise that she stayed with the bulls. To this end, Chen reiterated an Overweight rating and $9 price target, indicating 77% upside potential. (To watch Chen’s track record, click here)  

Based on 100% Street support, the analyst community agrees with Chen, and EVFM gets a Strong Buy from the analyst consensus. At $12.33, the average price target implies even larger upside potential, with the figure landing at 143%. (See Evofem price targets and analyst ratings on TipRanks)

Epizyme (EPZM) 

Epizyme wants to change the way cancer and other serious diseases are treated by using epigenetic medicines. As its TAZVERIK drug has already received the go ahead for use in epithelioid sarcoma (ES) and could get approval for an additional indication, Wall Street focus has locked in on EPZM.  

The PDUFA date for TAZVERIK’s use in 3L+ follicular lymphoma (FL) is slated for June 18, and Wedbush’s David Nierengarten thinks the odds are in the company’s favor. “We fully expect that the company’s lead asset, the oral EZH2 inhibitor TAZVERIK, will follow up its recent approval in epithelioid sarcoma (ES) with accelerated approval in 3L+ follicular lymphoma (FL) irrespective of EZH2 status... which we view as grounded in its first-in-class novel mechanism of action, compelling single-agent efficacy profile, already attained relatively favorable label around safety (including no required AdComm), and the cancer’s limited treatment options,” he commented.  

Nierengarten goes so far as to say Wall Street is underestimating TAZVERIK’s blockbuster potential, stating that its unique clinical profile and competitive pricing could translate to widespread access and rapid adoption. According to the five-star analyst’s projections, worldwide sales across indications stand to hit the $1 billion mark in full year 2024. It should also be noted that the therapy’s clinical profile could lead to investigation in earlier lines of treatment as well as in conjunction with standard treatments and other investigational agents, expanding its opportunity in FL.  

The good news doesn’t end there. “Because of this outlook, and EPZM’s status as a predominantly single-asset, small molecule commercial stage oncology company, we view EPZM as a particularly attractive bolt-on acquisition candidate to prospective larger pharmas with established oncology portfolios,” Nierengarten said. 

In line with his bullish stance, Nierengarten left an Outperform call and $30 price target on the stock. This implies shares could climb 70% higher in the next twelve months. (To watch Nierengarten’s track record, click here

Turning now to the rest of the Street, other analysts have also been impressed. 6 Buys and 2 Holds issued in the last three months add up to a Strong Buy consensus rating. Should the $28.50 average price target be met, a 61% twelve-month gain could be in the cards. (See Epizyme stock analysis on TipRanks)

Heron Therapeutics (HRTX) 

Last but not least we have Heron Therapeutics, which has made noteworthy strides in the pain management space. While COVID-19 forced the FDA to push back the original March PDUFA date for its HTX-011 candidate by three months, several members of the Street remain unphased by the delay. 

Preparing for the new June 26 PDUFA, management believes the date won’t be further affected by the ongoing public health crisis. Writing for Needham, analyst Serge Belanger thinks the delay is most likely related to the FDA Pain Division’s reputation of missing or extending PDUFA dates, and doesn’t reflect any issues with HTX-011.  

Even though the FDA had issued a Complete Response Letter (CRL) which required a reinspection of the HTX-011 contract manufacturing site, the inspection addressed concerns raised in the CRL. It was also an important pre-approval step completed before the FDA enacted travel restrictions that could have prevented the visit. 

“We view the upcoming and long-awaited approval of HTX-011 as the key catalyst for HRTX. Since the HTX-011 NDA has been in front of the FDA since 2018 and a pre-approval inspection has been conducted, odds are good that the upcoming late-June PDUFA will not be affected by COVID-19. We expect HTX-011 to be approved with a best-in-class label and play a prominent role in the rapidly growing post-op pain management market,” Belanger explained. 

The Needham analyst doesn’t dispute the fact that most elective procedures have been delayed due to COVID-19, but he argues that once the situation improves, the candidate will be able to compete in the expanding post-op pain management market.  

Based on everything HRTX has going for it, Belanger left his Buy rating and $44 price target unchanged. Given this target, the upside potential comes in at a whopping 193%. (To watch Belanger’s track record, click here

What does the rest of the Street have to say? Out of 5 recent reviews, 100% were bullish, making the consensus rating a Strong Buy. With an average price target of $36.20, the possible twelve-month gain lands at 141%. (See Heron stock analysis on TipRanks)

To find good ideas for healthcare stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights.

The post 3 Top Biotech Stocks with FDA Approvals on the Horizon appeared first on TipRanks Financial Blog.

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Key shipping company files for Chapter 11 bankruptcy

The Illinois-based general freight trucking company filed for Chapter 11 bankruptcy to reorganize.

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The U.S. trucking industry has had a difficult beginning of the year for 2024 with several logistics companies filing for bankruptcy to seek either a Chapter 7 liquidation or Chapter 11 reorganization.

The Covid-19 pandemic caused a lot of supply chain issues for logistics companies and also created a shortage of truck drivers as many left the business for other occupations. Shipping companies, in the meantime, have had extreme difficulty recruiting new drivers for thousands of unfilled jobs.

Related: Tesla rival’s filing reveals Chapter 11 bankruptcy is possible

Freight forwarder company Boateng Logistics joined a growing list of shipping companies that permanently shuttered their businesses as the firm on Feb. 22 filed for Chapter 7 bankruptcy with plans to liquidate.

The Carlsbad, Calif., logistics company filed its petition in the U.S. Bankruptcy Court for the Southern District of California listing assets up to $50,000 and and $1 million to $10 million in liabilities. Court papers said it owed millions of dollars in liabilities to trucking, logistics and factoring companies. The company filed bankruptcy before any creditors could take legal action.

Lawsuits force companies to liquidate in bankruptcy

Lawsuits, however, can force companies to file bankruptcy, which was the case for J.J. & Sons Logistics of Clint, Texas, which on Jan. 22 filed for Chapter 7 liquidation in the U.S. Bankruptcy Court for the Western District of Texas. The company filed bankruptcy four days before the scheduled start of a trial for a wrongful death lawsuit filed by the family of a former company truck driver who had died from drowning in 2016.

California-based logistics company Wise Choice Trans Corp. shut down operations and filed for Chapter 7 liquidation on Jan. 4 in the U.S. Bankruptcy Court for the Northern District of California, listing $1 million to $10 million in assets and liabilities.

The Hayward, Calif., third-party logistics company, founded in 2009, provided final mile, less-than-truckload and full truckload services, as well as warehouse and fulfillment services in the San Francisco Bay Area.

The Chapter 7 filing also implemented an automatic stay against all legal proceedings, as the company listed its involvement in four legal actions that were ongoing or concluded. Court papers reportedly did not list amounts for damages.

In some cases, debtors don't have to take a drastic action, such as a liquidation, and can instead file a Chapter 11 reorganization.

Truck shipping products.

Shutterstock

Nationwide Cargo seeks to reorganize its business

Nationwide Cargo Inc., a general freight trucking company that also hauls fresh produce and meat, filed for Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court for the Northern District of Illinois with plans to reorganize its business.

The East Dundee, Ill., shipping company listed $1 million to $10 million in assets and $10 million to $50 million in liabilities in its petition and said funds will not be available to pay unsecured creditors. The company operates with 183 trucks and 171 drivers, FreightWaves reported.

Nationwide Cargo's three largest secured creditors in the petition were Equify Financial LLC (owed about $3.5 million,) Commercial Credit Group (owed about $1.8 million) and Continental Bank NA (owed about $676,000.)

The shipping company reported gross revenue of about $34 million in 2022 and about $40 million in 2023.  From Jan. 1 until its petition date, the company generated $9.3 million in gross revenue.

Related: Veteran fund manager picks favorite stocks for 2024

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Key shipping company files Chapter 11 bankruptcy

The Illinois-based general freight trucking company filed for Chapter 11 bankruptcy to reorganize.

Published

on

The U.S. trucking industry has had a difficult beginning of the year for 2024 with several logistics companies filing for bankruptcy to seek either a Chapter 7 liquidation or Chapter 11 reorganization.

The Covid-19 pandemic caused a lot of supply chain issues for logistics companies and also created a shortage of truck drivers as many left the business for other occupations. Shipping companies, in the meantime, have had extreme difficulty recruiting new drivers for thousands of unfilled jobs.

Related: Tesla rival’s filing reveals Chapter 11 bankruptcy is possible

Freight forwarder company Boateng Logistics joined a growing list of shipping companies that permanently shuttered their businesses as the firm on Feb. 22 filed for Chapter 7 bankruptcy with plans to liquidate.

The Carlsbad, Calif., logistics company filed its petition in the U.S. Bankruptcy Court for the Southern District of California listing assets up to $50,000 and and $1 million to $10 million in liabilities. Court papers said it owed millions of dollars in liabilities to trucking, logistics and factoring companies. The company filed bankruptcy before any creditors could take legal action.

Lawsuits force companies to liquidate in bankruptcy

Lawsuits, however, can force companies to file bankruptcy, which was the case for J.J. & Sons Logistics of Clint, Texas, which on Jan. 22 filed for Chapter 7 liquidation in the U.S. Bankruptcy Court for the Western District of Texas. The company filed bankruptcy four days before the scheduled start of a trial for a wrongful death lawsuit filed by the family of a former company truck driver who had died from drowning in 2016.

California-based logistics company Wise Choice Trans Corp. shut down operations and filed for Chapter 7 liquidation on Jan. 4 in the U.S. Bankruptcy Court for the Northern District of California, listing $1 million to $10 million in assets and liabilities.

The Hayward, Calif., third-party logistics company, founded in 2009, provided final mile, less-than-truckload and full truckload services, as well as warehouse and fulfillment services in the San Francisco Bay Area.

The Chapter 7 filing also implemented an automatic stay against all legal proceedings, as the company listed its involvement in four legal actions that were ongoing or concluded. Court papers reportedly did not list amounts for damages.

In some cases, debtors don't have to take a drastic action, such as a liquidation, and can instead file a Chapter 11 reorganization.

Truck shipping products.

Shutterstock

Nationwide Cargo seeks to reorganize its business

Nationwide Cargo Inc., a general freight trucking company that also hauls fresh produce and meat, filed for Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court for the Northern District of Illinois with plans to reorganize its business.

The East Dundee, Ill., shipping company listed $1 million to $10 million in assets and $10 million to $50 million in liabilities in its petition and said funds will not be available to pay unsecured creditors. The company operates with 183 trucks and 171 drivers, FreightWaves reported.

Nationwide Cargo's three largest secured creditors in the petition were Equify Financial LLC (owed about $3.5 million,) Commercial Credit Group (owed about $1.8 million) and Continental Bank NA (owed about $676,000.)

The shipping company reported gross revenue of about $34 million in 2022 and about $40 million in 2023.  From Jan. 1 until its petition date, the company generated $9.3 million in gross revenue.

Related: Veteran fund manager picks favorite stocks for 2024

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Tight inventory and frustrated buyers challenge agents in Virginia

With inventory a little more than half of what it was pre-pandemic, agents are struggling to find homes for clients in Virginia.

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No matter where you are in the state, real estate agents in Virginia are facing low inventory conditions that are creating frustrating scenarios for their buyers.

“I think people are getting used to the interest rates where they are now, but there is just a huge lack of inventory,” said Chelsea Newcomb, a RE/MAX Realty Specialists agent based in Charlottesville. “I have buyers that are looking, but to find a house that you love enough to pay a high price for — and to be at over a 6.5% interest rate — it’s just a little bit harder to find something.”

Newcomb said that interest rates and higher prices, which have risen by more than $100,000 since March 2020, according to data from Altos Research, have caused her clients to be pickier when selecting a home.

“When rates and prices were lower, people were more willing to compromise,” Newcomb said.

Out in Wise, Virginia, near the westernmost tip of the state, RE/MAX Cavaliers agent Brett Tiller and his clients are also struggling to find suitable properties.

“The thing that really stands out, especially compared to two years ago, is the lack of quality listings,” Tiller said. “The slightly more upscale single-family listings for move-up buyers with children looking for their forever home just aren’t coming on the market right now, and demand is still very high.”

Statewide, Virginia had a 90-day average of 8,068 active single-family listings as of March 8, 2024, down from 14,471 single-family listings in early March 2020 at the onset of the COVID-19 pandemic, according to Altos Research. That represents a decrease of 44%.

Virginia-Inventory-Line-Chart-Virginia-90-day-Single-Family

In Newcomb’s base metro area of Charlottesville, there were an average of only 277 active single-family listings during the same recent 90-day period, compared to 892 at the onset of the pandemic. In Wise County, there were only 56 listings.

Due to the demand from move-up buyers in Tiller’s area, the average days on market for homes with a median price of roughly $190,000 was just 17 days as of early March 2024.

“For the right home, which is rare to find right now, we are still seeing multiple offers,” Tiller said. “The demand is the same right now as it was during the heart of the pandemic.”

According to Tiller, the tight inventory has caused homebuyers to spend up to six months searching for their new property, roughly double the time it took prior to the pandemic.

For Matt Salway in the Virginia Beach metro area, the tight inventory conditions are creating a rather hot market.

“Depending on where you are in the area, your listing could have 15 offers in two days,” the agent for Iron Valley Real Estate Hampton Roads | Virginia Beach said. “It has been crazy competition for most of Virginia Beach, and Norfolk is pretty hot too, especially for anything under $400,000.”

According to Altos Research, the Virginia Beach-Norfolk-Newport News housing market had a seven-day average Market Action Index score of 52.44 as of March 14, making it the seventh hottest housing market in the country. Altos considers any Market Action Index score above 30 to be indicative of a seller’s market.

Virginia-Beach-Metro-Area-Market-Action-Index-Line-Chart-Virginia-Beach-Norfolk-Newport-News-VA-NC-90-day-Single-Family

Further up the coastline on the vacation destination of Chincoteague Island, Long & Foster agent Meghan O. Clarkson is also seeing a decent amount of competition despite higher prices and interest rates.

“People are taking their time to actually come see things now instead of buying site unseen, and occasionally we see some seller concessions, but the traffic and the demand is still there; you might just work a little longer with people because we don’t have anything for sale,” Clarkson said.

“I’m busy and constantly have appointments, but the underlying frenzy from the height of the pandemic has gone away, but I think it is because we have just gotten used to it.”

While much of the demand that Clarkson’s market faces is for vacation homes and from retirees looking for a scenic spot to retire, a large portion of the demand in Salway’s market comes from military personnel and civilians working under government contracts.

“We have over a dozen military bases here, plus a bunch of shipyards, so the closer you get to all of those bases, the easier it is to sell a home and the faster the sale happens,” Salway said.

Due to this, Salway said that existing-home inventory typically does not come on the market unless an employment contract ends or the owner is reassigned to a different base, which is currently contributing to the tight inventory situation in his market.

Things are a bit different for Tiller and Newcomb, who are seeing a decent number of buyers from other, more expensive parts of the state.

“One of the crazy things about Louisa and Goochland, which are kind of like suburbs on the western side of Richmond, is that they are growing like crazy,” Newcomb said. “A lot of people are coming in from Northern Virginia because they can work remotely now.”

With a Market Action Index score of 50, it is easy to see why people are leaving the Washington-Arlington-Alexandria market for the Charlottesville market, which has an index score of 41.

In addition, the 90-day average median list price in Charlottesville is $585,000 compared to $729,900 in the D.C. area, which Newcomb said is also luring many Virginia homebuyers to move further south.

Median-Price-D.C.-vs.-Charlottesville-Line-Chart-90-day-Single-Family

“They are very accustomed to higher prices, so they are super impressed with the prices we offer here in the central Virginia area,” Newcomb said.

For local buyers, Newcomb said this means they are frequently being outbid or outpriced.

“A couple who is local to the area and has been here their whole life, they are just now starting to get their mind wrapped around the fact that you can’t get a house for $200,000 anymore,” Newcomb said.

As the year heads closer to spring, triggering the start of the prime homebuying season, agents in Virginia feel optimistic about the market.

“We are seeing seasonal trends like we did up through 2019,” Clarkson said. “The market kind of soft launched around President’s Day and it is still building, but I expect it to pick right back up and be in full swing by Easter like it always used to.”

But while they are confident in demand, questions still remain about whether there will be enough inventory to support even more homebuyers entering the market.

“I have a lot of buyers starting to come off the sidelines, but in my office, I also have a lot of people who are going to list their house in the next two to three weeks now that the weather is starting to break,” Newcomb said. “I think we are going to have a good spring and summer.”

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