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Oppenheimer: These 2 “Strong Buy” Stocks Are Poised to Surge by Over 80%

Oppenheimer: These 2 "Strong Buy" Stocks Are Poised to Surge by Over 80%

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Another earnings season has arrived, and this time the bar is set seriously low. The upcoming reports will shed some light on the extent of the damage inflicted by COVID-19. Expectations are low, and while there’s plenty of room for disappointments, Oppenheimer’s Chief Investment Strategist John Stoltzfus believes that there’s also an opportunity for some upside.

“COVID-19 resurgences notwithstanding the equity markets stateside have thus far shown persistent resilience that continues to confound bears and skeptics. It could be that their memory is lacking when it comes to previous recoveries from market events that have led us to the proverbial brink only to have the resilience of the of the U.S. economy save the day,” Stoltzfus commented.

Putting the S&P 500’s rebound from its March 23 low into context, the index has clawed its way back, giving the strategist hope that the unprecedented levels of stimulus will get the market out of the mess the pandemic created. Even though the market is waiting for a catalyst to determine its direction, Stoltzfus points out that historically, “progress not perfection” is what drives a turnaround, noting that evidence indicates serious progress is in fact being made.

Putting the strategist’s advice into concrete recommendations, Oppenheimer’s analysts point to two stocks in particular that could take off in the next twelve months. The firm, which lands among the top three on TipRanks’ list of Top Performing Research firms, sees over 80% upside potential in both. After using TipRanks’ database, we found out that each ticker has also received enough support from other Wall Street analysts to earn a “Strong Buy” consensus rating.    

GrowGeneration Corporation (GRWG)

Taking its place as the largest hydroponic equipment supplier in the U.S., GrowGeneration owns and operates specialty retail hydroponic and organic garden centers. Given its strong long-term growth narrative and its $6.95 share price, it’s no wonder GRWG recently earned a thumbs up from Oppenheimer.

Covering the stock for the firm, 5-star analyst Brian Nagel likes what he’s seeing, to put it lightly. “GRWG represents a leading, yet still early stage, up-and-coming retail chain within the rapidly expanding and dynamic market for hydroponic and organic gardening supplies,” he noted.

Speaking to its footprint, the company operates 27 stores in ten states. That said, over the next few years, Nagel estimates that new store additions, including acquisitions and greenfield expansions, could approach more than 20 units per year, putting its total number of locations at over 90 stores by 2023.

To help it reach its targets, the company is putting advanced infrastructure in place. As part of these efforts, GRWG implemented a new ERP system, and in June, the stores were connected to its website, allowing for BOPUS and other functionality.  

Expounding on this, Nagel stated, “Key to our initial positive outlook for GRWG is our view that the GRWG business model is now approaching a point of increased sustained underlying scalability... Our initial analysis suggests that, as GRWG accelerates further acquisition and organic expansion efforts, the company should increasingly capitalize upon scale-related synergies and over time deliver even better profit and cash generation.”

Additionally, after an all-primary, secondary equity offering, GRWG’s cash position lands at over $52 million, with only $314,000 in short- and long-term debt. Based on this, Nagel thinks that the company should be able to fund its near- and longer-term expansion objectives.

With the analyst projecting that through 2023, adjusted EBITDA will reach roughly $55 million on total company revenue of more than $400 million, Nagel doesn’t believe GRWG’s full value has been built into the share price.

To this end, Nagel rates GRWG a Buy along with a $15 price target. This target indicates shares could skyrocket 110% in the next year. (To watch Nagel’s track record, click here)

Turning now to the rest of the Street, other analysts are on the same page. Only Buy ratings, 5, to be exact, have been issued in the last three months, so the consensus rating is a Strong Buy. The $10.20 average price target puts the potential twelve-month gain at 42%. (See GrowGeneration stock analysis on TipRanks)

Relmada Therapeutics (RLMD)

Bringing extensive drug development capabilities to the table, Relmada Therapeutics is working to address the unmet needs in depression, central nervous system (CNS) and ophthalmological disorders. Based on the strength of its lead development candidate, REL-1017, Oppenheimer is getting on board.

Looking more closely at the asset, REL-1017 (dextromethadone) is an oral NMDA-receptor antagonist designed for use in major depressive disorder (MDD). According to firm analyst Jay Olson, what makes the therapy stand out is that “as the d-stereoisomer of methadone, REL-1017 is devoid of opioid activity while preserving affinity for the ketamine-binding site on NMDA receptors, which are hyperactive in MDD neuropathology.” On top of this, it can also generate BDNF expression, and this in turn improves synaptic plasticity. The analyst added, “Based on its novel MOA, REL-1017 should provide rapid and durable antidepressant effects with clean safety/tolerability.”

During the Phase 2a 202 trial in an MDD 2L+ adjunctive setting, the therapy showed statistical significance on all efficacy endpoints, including MADRS improvement, with the results supporting a differentiated profile, in Olson’s opinion.

Going forward, a pivotal Phase 3 program is set to initiate in the fourth quarter of 2020, with the FDA stating that two positive trials with a primary endpoint of 28-day MADRS improvement and 52-week safety data would support an NDA filing in the chronic MDD 2L+ adjunctive setting. Adding to the good news, in 1H21, the company might kick off a Phase 2 trial in a 2L+ monotherapy setting. “We expect REL-1017 to be a schedule IV/V drug and widely prescribed,” Olson noted.

Speaking to the market opportunity, the analyst told clients, “MDD occurs in ~7% of adults and remains a large unmet medical need despite multiple SOC treatments. SSRIs/SNRIs are predominantly prescribed but have slow onset and adverse side effects... REL-1017 would enter the treatment paradigm as an adjunctive to SSRIs/SNRIs in 2L+ patients.” The product could launch in 2023, with “total peak un-risk-adjusted sales for REL-1017 in MDD of $3.7 billion comprised of $3 billion and $700 million in 2L+ adjunctive and monotherapy settings, respectively, in 2035.”

To this end, Olson rates RLMD a Buy along with a $75 price target. Shares could appreciate by 87%, should the analyst’s thesis play out in the coming months. (To watch Olson’s track record, click here)   

Looking at the consensus breakdown, the rest of the Street agrees with Olson’s assessment. With 3 Buys and no Holds or Sells, the word on the Street is that RLMD is a Strong Buy. At $72.67, the average price target implies shares could rise 82% in the next year. (See Relmada stock-price forecast on TipRanks)

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

The post Oppenheimer: These 2 "Strong Buy" Stocks Are Poised to Surge by Over 80% appeared first on TipRanks Financial Blog.

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Coronavirus dashboard for October 5: an autumn lull as COVID-19 evolves towards seasonal endemicity

  – by New Deal democratBack in August I highlighted some epidemiological work by Trevor Bedford about what endemic COVID is likely to look like, based…

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 - by New Deal democrat

Back in August I highlighted some epidemiological work by Trevor Bedford about what endemic COVID is likely to look like, based on the rate of mutations and the period of time that previous infection makes a recovered person resistant to re-infection. Here’s his graph:




He indicated that it “illustrate[s] a scenario where we end up in a regime of year-round variant-driven circulation with more circulation in the winter than summer, but not flu-like winter seasons and summer troughs.”

In other words, we could expect higher caseloads during regular seasonal waves, but unlike influenza, the virus would never entirely recede into the background during the “off” seasons.

That is what we are seeing so far this autumn.

Confirmed cases have continued to decline, presently just under 45,000/day, a little under 1/3rd of their recent summer peak in mid-June. Deaths have been hovering between 400 and 450/day, about in the middle of their 350-550 range since the beginning of this past spring:



The longer-term graph of each since the beginning of the pandemic shows that, at their present level cases are at their lowest point since summer 2020, with the exception of a brief period during September 2020, the May-July lull in 2021, and the springtime lull this year. Deaths since spring remain lower than at any point except the May-July lull of 2021:



Because so many cases are asymptomatic, or people confirm their cases via home testing but do not get confirmation by “official” tests, we know that the confirmed cases indicated above are lower than the “real” number. For that, here is the long-term look from Biobot, which measures COVID concentrations in wastewater:



The likelihood is that there are about 200,000 “actual” new cases each day at present. But even so, this level is below any time since Delta first hit in summer 2021, with the exception of last autumn and this spring’s lulls.

Hospitalizations show a similar pattern. They are currently down 50% since their summer peak, at about 25,000/day:



This is also below any point in the pandemic except for briefly during September 2020, the May-July 2021 low, and this past spring’s lull.

The CDC’s most recent update of variants shows that BA.5 is still dominant, causing about 81% of cases, while more recent offshoots of BA.2, BA.4, and BA.5 are causing the rest. BA’s share is down from 89% in late August:



But this does not mean that the other variants are surging, because cases have declined from roughly 90,000 to 45,000 during that time. Here’s how the math works out:

89% of 90k=80k (remaining variants cause 10k cases)
81% of 45k=36k (remaining variants cause 9k cases)

The batch of new variants have been dubbed the “Pentagon” by epidmiologist JP Weiland, and have caused a sharp increase in cases in several countries in Europe and elsewhere. Here’s what she thinks that means for the US:


But even she is not sure that any wave generated by the new variants will exceed summer’s BA.5 peak, let alone approach last winter’s horrible wave:



In summary, we have having an autumn lull as predicted by the seasonal model. There will probably be a winter wave, but the size of that wave is completely unknown, primarily due to the fact that probably 90%+ of the population has been vaccinated and/or previously infected, giving rise to at least some level of resistance - a disease on its way to seasonal endemicity.

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The determinants of persistent and severe COVID-19 revealed

As COVID-19 wreaks havoc across the globe, one characteristic of the infection has not gone unnoticed. The disease is heterogeneous in nature with symptoms…

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As COVID-19 wreaks havoc across the globe, one characteristic of the infection has not gone unnoticed. The disease is heterogeneous in nature with symptoms and severity of the condition spanning a wide range. The medical community now believes this is attributed to variations in the human hosts’ biology and has little to do with the virus per se. Shedding some light on this conundrum are Associate Professor SUMI Tomonari from Okayama University, Research Institute for Interdisciplinary Science (RIIS) and Associate Professor Kouji Harada from Toyohashi University of Technology, the Center for IT-based Education (CITE). The duo recently reported their findings on imbalances in the host immune system that facilitate persistent or severe forms of the disease in some patients.

The researchers commenced their study by computer simulations with models based on a host’s immune system and its natural response to SARS-CoV-2 exposure. Mathematical equations for the dynamics of cells infected by SARS-CoV-2 were plugged in to predict their behavior. Now, the immune system has messenger cells known as dendritic cells (DCs). These cells report information (in the form of antigens) about the invaders to the warriors, or T cells, of the immune system. The model showed that at the onset of infection, DCs from infected tissues were activated and then antibodies to neutralize SARS-CoV-2 gradually started building.

To investigate long-term COVID-19, the behavior of DCs 7 months after infection was evaluated by the computer simulation. the baseline model simulation revealed that DCs drastically decreased during the peak of infection and slowly built up again. However, they tended to remain below pre-infection levels. These observations were similar to those seen in clinical patient samples. It seemed like low DC levels were associated with tenacious long-term infection.

The subsequent step was to understand if DC function contributed to disease severity. It was found that a deficiency of the antigen-reporting function of DCs and lowered levels of chemicals known as interferons released by them were related to severe symptoms. A decrease in both these functions resulted in higher amounts of virus in the blood (viral load). What’s more, the researchers also found two factors that affected the virus’s ability to replicate in the host, namely, antigen-reporting DCs and the presence of antibodies against the virus. Anomalies in these functions could hamper viral clearance, enabling it to stay in the body longer than expected, whereas a high ability of these immune functions suppresses viral replication and yields prompt viral clearance.

Components of immune signalling that directly affect the outcome of COVID-19 infection were revealed in this study. “ Our mathematical model predicted the persistent DC reduction and showed that certain patients with severe and even mild symptoms could not effectively eliminate the virus and could potentially develop long COVID,” concludes the duo. A better understanding of these immune responses could help shape the prognosis of and therapeutic interventions against COVID-19.

Background
Dendritic cells and the immune system: Dendritic cells (DCs) are part of the body’s innate immune system and are present in areas that come in close contact with pathogens such as the skin, respiratory tract, and gastrointestinal tract. When these tissues are infected, the DCs collate information about the pathogen and display it. DCs are now activated and transform into antigen-presenting cells (APCs). APCs then migrate to the lymph nodes where T cells reside to report this information. The T cells then migrate to and kill the invading pathogens. DCs also play a role in inflammation, a protective mechanism of the body, by releasing interferons. Interferons are chemical messengers that warn neighboring cells of a viral infection.

It is known that although the numbers of DCs do not change with age, their function is impaired. Since older patients have a higher proclivity for developing severe COVID-19, the patterns of DC function in severe infection were thus investigated by the computer simulation experiments.

Credit: Okayama University

As COVID-19 wreaks havoc across the globe, one characteristic of the infection has not gone unnoticed. The disease is heterogeneous in nature with symptoms and severity of the condition spanning a wide range. The medical community now believes this is attributed to variations in the human hosts’ biology and has little to do with the virus per se. Shedding some light on this conundrum are Associate Professor SUMI Tomonari from Okayama University, Research Institute for Interdisciplinary Science (RIIS) and Associate Professor Kouji Harada from Toyohashi University of Technology, the Center for IT-based Education (CITE). The duo recently reported their findings on imbalances in the host immune system that facilitate persistent or severe forms of the disease in some patients.

The researchers commenced their study by computer simulations with models based on a host’s immune system and its natural response to SARS-CoV-2 exposure. Mathematical equations for the dynamics of cells infected by SARS-CoV-2 were plugged in to predict their behavior. Now, the immune system has messenger cells known as dendritic cells (DCs). These cells report information (in the form of antigens) about the invaders to the warriors, or T cells, of the immune system. The model showed that at the onset of infection, DCs from infected tissues were activated and then antibodies to neutralize SARS-CoV-2 gradually started building.

To investigate long-term COVID-19, the behavior of DCs 7 months after infection was evaluated by the computer simulation. the baseline model simulation revealed that DCs drastically decreased during the peak of infection and slowly built up again. However, they tended to remain below pre-infection levels. These observations were similar to those seen in clinical patient samples. It seemed like low DC levels were associated with tenacious long-term infection.

The subsequent step was to understand if DC function contributed to disease severity. It was found that a deficiency of the antigen-reporting function of DCs and lowered levels of chemicals known as interferons released by them were related to severe symptoms. A decrease in both these functions resulted in higher amounts of virus in the blood (viral load). What’s more, the researchers also found two factors that affected the virus’s ability to replicate in the host, namely, antigen-reporting DCs and the presence of antibodies against the virus. Anomalies in these functions could hamper viral clearance, enabling it to stay in the body longer than expected, whereas a high ability of these immune functions suppresses viral replication and yields prompt viral clearance.

Components of immune signalling that directly affect the outcome of COVID-19 infection were revealed in this study. “ Our mathematical model predicted the persistent DC reduction and showed that certain patients with severe and even mild symptoms could not effectively eliminate the virus and could potentially develop long COVID,” concludes the duo. A better understanding of these immune responses could help shape the prognosis of and therapeutic interventions against COVID-19.

Background
Dendritic cells and the immune system: Dendritic cells (DCs) are part of the body’s innate immune system and are present in areas that come in close contact with pathogens such as the skin, respiratory tract, and gastrointestinal tract. When these tissues are infected, the DCs collate information about the pathogen and display it. DCs are now activated and transform into antigen-presenting cells (APCs). APCs then migrate to the lymph nodes where T cells reside to report this information. The T cells then migrate to and kill the invading pathogens. DCs also play a role in inflammation, a protective mechanism of the body, by releasing interferons. Interferons are chemical messengers that warn neighboring cells of a viral infection.

It is known that although the numbers of DCs do not change with age, their function is impaired. Since older patients have a higher proclivity for developing severe COVID-19, the patterns of DC function in severe infection were thus investigated by the computer simulation experiments.


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Gonorrhea became more drug resistant while attention was on COVID-19 – a molecular biologist explains the sexually transmitted superbug

The US currently has only one antibiotic available to treat gonorrhea – and it’s becoming less effective.

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The _Neisseria gonorrhoeae_ bacterium causes gonorrhea by infecting mucous membranes. Design Cells/iStock Getty Images Plus via Getty Images

COVID-19 has rightfully dominated infectious disease news since 2020. However, that doesn’t mean other infectious diseases took a break. In fact, U.S. rates of infection by gonorrhea have risen during the pandemic.

Unlike COVID-19, which is a new virus, gonorrhea is an ancient disease. The first known reports of gonorrhea date from China in 2600 BC, and the disease has plagued humans ever since. Gonorrhea has long been one of the most commonly reported bacterial infections in the U.S.. It is caused by the bacterium Neisseria gonorrhoeae, which can infect mucous membranes in the genitals, rectum, throat and eyes.

Gonorrhea is typically transmitted by sexual contact. It is sometimes referred to as “the clap.”

Prior to the pandemic, there were around 1.6 million new gonorrhea infections each year. Over 50% of those cases involved strains of gonorrhea that had become unresponsive to treatment with at least one antibiotic.

In 2020, gonorrhea infections initially went down 30%, most likely due to pandemic lockdowns and social distancing. However, by the end of 2020 – the last year for which data from the Centers for Disease Control and Prevention is available – reported infections were up 10% from 2019.

It is unclear why infections went up even though some social distancing measures were still in place. But the CDC notes that reduced access to health care may have led to longer infections and more opportunity to spread the disease, and sexual activity may have increased when initial shelter-in-place orders were lifted.

As a molecular biologist, I have been studying bacteria and working to develop new antibiotics to treat drug-resistant infections for 20 years. Over that time, I’ve seen the problem of antibiotic resistance take on new urgency.

Gonorrhea, in particular, is a major public health concern, but there are concrete steps that people can take to prevent it from getting worse, and new antibiotics and vaccines may improve care in the future.

How to recognize gonorrhea

Around half of gonorrhea infections are asymptomatic and can only be detected through screening. Infected people without symptoms can unknowingly spread gonorrhea to others.

Typical early signs of symptomatic gonorrhea include a painful or burning sensation when peeing, vaginal or penal discharge, or anal itching, bleeding or discharge. Left untreated, gonorrhea can cause blindness and infertility. Antibiotic treatment can cure most cases of gonorrhea as long as the infection is susceptible to at least one antibiotic.

There is currently only one recommended treatment for gonorrhea in the U.S. – an antibiotic called ceftriaxone – because the bacteria have become resistant to other antibiotics that were formerly effective against it. Seven different families of antibiotics have been used to treat gonorrhea in the past, but many strains are now resistant to one or more of these drugs.

The CDC tracks the emergence and spread of drug-resistant gonorrhea strains.

Why gonorrhea is on the rise

A few factors have contributed to the increase in infections during the COVID-19 pandemic.

Early in the pandemic, most U.S. labs capable of testing for gonorrhea switched to testing for COVID-19. These labs have also been contending with the same shortages of staff and supplies that affect medical facilities across the country.

Many people have avoided clinics and hospitals during the pandemic, which has decreased opportunities to identify and treat gonorrhea infections before they spread. In fact, because of decreased screening over the past two and a half years, health care experts don’t know exactly how much antibiotic-resistant gonorrhea has spread.

Also, early in the pandemic, many doctors prescribed antibiotics to COVID-19 patients even though antibiotics do not work on viruses like SARS-CoV-2, the virus that causes COVID-19. Improper use of antibiotics can contribute to greater drug resistance, so it is reasonable to suspect that this has happened with gonorrhea.

Overuse of antibiotics

Even prior to the pandemic, resistance to antibiotic treatment for bacterial infections was a growing problem. In the U.S., antibiotic-resistant gonorrhea infections increased by over 70% from 2017-2019.

Neisseria gonorrhoeae is a specialist at picking up new genes from other pathogens and from “commensal,” or helpful, bacteria. These helpful bacteria can also become antibiotic-resistant, providing more opportunities for the gonorrhea bacterium to acquire resistant genes.

Strains resistant to ceftriaxone have been observed in other countries, including Japan, Thailand, Australia and the U.K., raising the possibility that some gonorrhea infections may soon be completely untreatable.

Steps toward prevention

Currently, changes in behavior are among the best ways to limit overall gonorrhea infections – particularly safer sexual behavior and condom use.

However, additional efforts are needed to delay or prevent an era of untreatable gonorrhea.

Scientists can create new antibiotics that are effective against resistant strains; however, decreased investment in this research and development over the past 30 years has slowed the introduction of new antibiotics to a trickle. No new drugs to treat gonorrhea have been introduced since 2019, although two are in the final stage of clinical trials.

Vaccination against gonorrhea isn’t possible presently, but it could be in the future. Vaccines effective against the meningitis bacterium, a close relative of gonorrhea, can sometimes also provide protection against gonorrhea. This suggests that a gonorrhea vaccine should be achievable.

The World Health Organization has begun an initiative to reduce gonorrhea worldwide by 90% before 2030. This initiative aims to promote safe sexual practices, increase access to high-quality health care for sexually transmitted diseases and expand testing so that asymptomatic infections can be treated before they spread. The initiative is also advocating for increased research into vaccines and new antibiotics to treat gonorrhea.

Setbacks in fighting drug-resistant gonorrhea during the COVID-19 pandemic make these actions even more urgent.

Kenneth Keiler receives funding from NIH.

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