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Wells Fargo: These 3 ‘Strong Buy’ Stocks Are Must-Watch Names

Wells Fargo: These 3 ‘Strong Buy’ Stocks Are Must-Watch Names

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Are the markets on the mend? If you ask Wells Fargo’s head of equity strategy Chris Harvey, the answer is yes. Citing the S&P 500’s remarkable rebound since its March low and its strong showing over the last few days, the strategist argues that there has been an “incremental improvement.” 

To this end, Harvey recommends that investors stick with equities, and snap up names “trading at or below book value,” pointing to small-caps in particular.     

Taking Harvey’s outlook into consideration, we wanted to check out three small-cap stocks from the healthcare sector that are backed by Wells Fargo, a firm which happens to land the eighth spot on TipRanks’ list of Top Performing Research Firms.

After running the tickers through TipRanks’ database, we found out that each has been scoring points with the rest of the Street, earning a “Strong Buy” consensus rating. Not to mention all three boast plenty of upside potential.

Avidity Biosciences Inc. (RNA)

Developing a new class of oligonucleotide-based therapies called antibody oligonucleotide conjugates (AOCs) designed to overcome current limitations, Avidity Biosciences wants to offer better treatments for a wide range of serious diseases. Based on its impressive technology platform, Wells Fargo just gave RNA a thumbs up.  

Representing the firm, five-star analyst Jim Birchenough told clients, “Our positive outlook is based on the company’s leading AOC platform and prospects to extend benefit of RNA therapeutics beyond the liver and localized CNS delivery of category leader drug approvals.”

Other companies have tried to make headway in the myotonic dystrophy (DM1) space, with “Ionis Pharmaceuticals and partner Biogen yielding evidence of target knockdown and positive downstream effects on key splice variants in DM1 patients achieving adequate tissue concentration.” However, this effect was limited to only a small sample size at a very high dose.

Preclinical data for AOCs, on the other hand, showed that lower doses produced a 50-75% DMPK target knockdown. Therefore, when the Phase 1 program for its AOC1001 asset is initiated, likely in 2021, Birchenough argues “that early data on target knockdown should be predictive of clinical benefit given the clear role of DMPK in disease pathogenesis and lower disease burden in patients with reduced DMPK expression.”

Additionally, RNA has clinical programs in Duschenne Muscular Dystrophy (DMD) and muscle atrophy, which are slated to kick off in 2022. Looking specifically at AOC-DMD, Birchenough believes the threshold for approval is low. To support this claim, he highlights the fact that Sarepta Therapeutics’ EXONDYS 51 for exon 51 skipping and VYONDYS for exon 53 skipping were approved based on dystrophin increases of only 0.9%, with no improvement in motor function shown. For AOCs, there was a fiftyfold increase in exon skipping compared with a simple oligonucleotide approach and 60% exon 44 skipping specifically in patient-derived myocytes. As a result, early biomarker data for RNA’s therapy could fuel major upside.

Reflecting another positive, the company’s pipeline also includes AOC candidates for genetic muscle diseases, including fascioscapulohumeral muscular dystrophy (FSHD) and Pompe disease, with the DUX4 and glycogen synthase 1 (GYS1) targets offering preclinical validation, in Birchenough’s opinion. He added, “Broader efforts beyond muscle disease, including the large immunology collaboration with Eli Lilly for up to 6 targets and $405 million in milestones each, along with sales royalties, represent significant option value, in our view.”

In line with his optimistic take, Birchenough joined the bulls. In addition to kicking off coverage with an Overweight call, he set a $60 price target, suggesting a whopping 153% upside potential. (To watch Birchenough’s track record, click here)      

Do other analysts agree? They do. Only Buy ratings, 4, in fact, have been issued in the last three months, so the consensus rating is a Strong Buy. At $43.33, the average price target puts the upside potential at 83%. (See RNA stock analysis on TipRanks)

RAPT Therapeutics (RAPT)

Fully focused on developing oral therapeutics that target key drivers of the immune system, RAPT Therapeutics hopes to stomp out cancer and other inflammatory diseases. Ahead of a key data readout in the second half of 2020, Wells Fargo is singing its praises.

Analyst Yanan Zhu recently had a call with management that centered around its FLX475 cancer program. After the discussion, he sees an increased probability of success in charged tumors going into the proof-of-concept data readout across eight Phase 2 cohorts for the ongoing Phase 1/2 study in 2H20.

The company noted that enrollment for the Phase 2 part is on schedule, and that it’s trying to get as many of the eight cohorts filled as possible. Hopefully, it will be able to report at least the initial response rate data across most, if not all, cohorts by YE20.

Expounding on this, Zhu stated, “RAPT also noted that the data continue to look encouraging from the company’s perspective. In terms of the format of the data release, RAPT is aiming to report data at a major medial meeting, but if the abstract submission timeline becomes a bottleneck, RAPT may report the data in the form of a corporate update. Regarding the previously reported TECENTRIQ-refractory NSCLC patient with a confirmed PR in the phase 1 portion, RAPT noted that the patient continues to be in response at 13 months on study (FLX475 + KEYTRUDA), with a duration of response of nearly 1 year.”

It should be noted that COVID-19 delayed the enrollment for its Phase 1 study of RPT193 in atopic dermatitis. That said, enrollment has been restarted, and the data release remains on track for YE20. If that wasn’t enough, Zhu points out that its peers’ approach involving the depletion of Tregs using antibodies against CCR4 or CCR8 may be problematic.

“RAPT’s Small Molecule CCR4 Inhibitor Approach is Not Limited by the Challenges of Treg Depleting Approach. FLX475 is designed to block Treg migration to TME, without depleting Tregs. In addition, Treg migration to healthy tissues is mediated by other chemokine pathways and is not affected by FLX475,” Zhu commented.

Everything that RAPT has going for it keeps Zhu standing squarely with the bulls. He left an Overweight rating on the stock and bumped up the price target from $33 to $40. Should the target be met, a twelve-month gain of 59% could be in store. (To watch Zhu’s track record, click here

The bulls have it on this one. Out of 3 total reviews assigned in the last three months, all 3 analysts rated the stock a Buy. So, RAPT gets a unanimous Strong Buy consensus rating. The $39 average price target brings the upside potential to 55%. (See RAPT stock analysis on TipRanks)

Progenity Inc. (PROG)

Last but not least we have Progenity, which works with healthcare providers to offer advanced genetic testing services. While the company does face some challenges, Wells Fargo believes it will ultimately emerge as a long-term winner.

Covering the stock for the firm, four-star analyst Dan Leonard acknowledges the fact that shifting from an out-of-network lab to an in-network lab with the major insurance companies can create a short-term headache, with price reductions preceding volume gains. “The COVID pandemic, when lab volumes are off sharply from normalized levels, exacerbates this short-term pain. That said, we believe broader network access offers opportunity for volume gains in 2021 and beyond,” the analyst commented.

Additionally, there is a risk that other technologies will drive price deflation for non-invasive prenatal testing (NIPT). That being said, Leonard thinks the company’s Innatal 4 program could allow it to “play both offense and defense within this deflation trend.” He added, “We expect commercialization of Innatal 4 could reduce direct NIPT COGS by at least 50%. Further, we believe lower pricing could ultimately expand the market for NIPT to include more average risk pregnancies.”

Further adding to his optimism, Leonard points out that PROG’s preeclampsia rule-out test could have a material impact on its core reproductive health business. To back this up, he noted, “Our checks largely confirm that development of a preeclampsia rule-out test is the right design goal to target an important unmet medical need – determining how to manage patients who present with signs/symptoms of preeclampsia, a leading cause of maternal mortality.”

With PROG’s ingestible medical device program offering additional upside, the deal is sealed for Leonard. To this end, he initiated coverage with an Overweight rating. Along with the call, an $11 price target is attached to the stock. This figure implies shares could surge 22% in the next year. (To watch Leonard’s track record, click here)

Judging by the consensus breakdown, other analysts also like what they’re seeing. 4 Buys and no Holds or Sells add up to a Strong Buy consensus rating. The $13.75 average price target is more aggressive than Leonard’s, and implies 52% upside potential. (See Progenity 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 Wells Fargo: These 3 'Strong Buy' Stocks Are Must-Watch Names appeared first on TipRanks Financial Blog.

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The next pandemic? It’s already here for Earth’s wildlife

Bird flu is decimating species already threatened by climate change and habitat loss.

I am a conservation biologist who studies emerging infectious diseases. When people ask me what I think the next pandemic will be I often say that we are in the midst of one – it’s just afflicting a great many species more than ours.

I am referring to the highly pathogenic strain of avian influenza H5N1 (HPAI H5N1), otherwise known as bird flu, which has killed millions of birds and unknown numbers of mammals, particularly during the past three years.

This is the strain that emerged in domestic geese in China in 1997 and quickly jumped to humans in south-east Asia with a mortality rate of around 40-50%. My research group encountered the virus when it killed a mammal, an endangered Owston’s palm civet, in a captive breeding programme in Cuc Phuong National Park Vietnam in 2005.

How these animals caught bird flu was never confirmed. Their diet is mainly earthworms, so they had not been infected by eating diseased poultry like many captive tigers in the region.

This discovery prompted us to collate all confirmed reports of fatal infection with bird flu to assess just how broad a threat to wildlife this virus might pose.

This is how a newly discovered virus in Chinese poultry came to threaten so much of the world’s biodiversity.

H5N1 originated on a Chinese poultry farm in 1997. ChameleonsEye/Shutterstock

The first signs

Until December 2005, most confirmed infections had been found in a few zoos and rescue centres in Thailand and Cambodia. Our analysis in 2006 showed that nearly half (48%) of all the different groups of birds (known to taxonomists as “orders”) contained a species in which a fatal infection of bird flu had been reported. These 13 orders comprised 84% of all bird species.

We reasoned 20 years ago that the strains of H5N1 circulating were probably highly pathogenic to all bird orders. We also showed that the list of confirmed infected species included those that were globally threatened and that important habitats, such as Vietnam’s Mekong delta, lay close to reported poultry outbreaks.

Mammals known to be susceptible to bird flu during the early 2000s included primates, rodents, pigs and rabbits. Large carnivores such as Bengal tigers and clouded leopards were reported to have been killed, as well as domestic cats.

Our 2006 paper showed the ease with which this virus crossed species barriers and suggested it might one day produce a pandemic-scale threat to global biodiversity.

Unfortunately, our warnings were correct.

A roving sickness

Two decades on, bird flu is killing species from the high Arctic to mainland Antarctica.

In the past couple of years, bird flu has spread rapidly across Europe and infiltrated North and South America, killing millions of poultry and a variety of bird and mammal species. A recent paper found that 26 countries have reported at least 48 mammal species that have died from the virus since 2020, when the latest increase in reported infections started.

Not even the ocean is safe. Since 2020, 13 species of aquatic mammal have succumbed, including American sea lions, porpoises and dolphins, often dying in their thousands in South America. A wide range of scavenging and predatory mammals that live on land are now also confirmed to be susceptible, including mountain lions, lynx, brown, black and polar bears.

The UK alone has lost over 75% of its great skuas and seen a 25% decline in northern gannets. Recent declines in sandwich terns (35%) and common terns (42%) were also largely driven by the virus.

Scientists haven’t managed to completely sequence the virus in all affected species. Research and continuous surveillance could tell us how adaptable it ultimately becomes, and whether it can jump to even more species. We know it can already infect humans – one or more genetic mutations may make it more infectious.

At the crossroads

Between January 1 2003 and December 21 2023, 882 cases of human infection with the H5N1 virus were reported from 23 countries, of which 461 (52%) were fatal.

Of these fatal cases, more than half were in Vietnam, China, Cambodia and Laos. Poultry-to-human infections were first recorded in Cambodia in December 2003. Intermittent cases were reported until 2014, followed by a gap until 2023, yielding 41 deaths from 64 cases. The subtype of H5N1 virus responsible has been detected in poultry in Cambodia since 2014. In the early 2000s, the H5N1 virus circulating had a high human mortality rate, so it is worrying that we are now starting to see people dying after contact with poultry again.

It’s not just H5 subtypes of bird flu that concern humans. The H10N1 virus was originally isolated from wild birds in South Korea, but has also been reported in samples from China and Mongolia.

Recent research found that these particular virus subtypes may be able to jump to humans after they were found to be pathogenic in laboratory mice and ferrets. The first person who was confirmed to be infected with H10N5 died in China on January 27 2024, but this patient was also suffering from seasonal flu (H3N2). They had been exposed to live poultry which also tested positive for H10N5.

Species already threatened with extinction are among those which have died due to bird flu in the past three years. The first deaths from the virus in mainland Antarctica have just been confirmed in skuas, highlighting a looming threat to penguin colonies whose eggs and chicks skuas prey on. Humboldt penguins have already been killed by the virus in Chile.

A colony of king penguins.
Remote penguin colonies are already threatened by climate change. AndreAnita/Shutterstock

How can we stem this tsunami of H5N1 and other avian influenzas? Completely overhaul poultry production on a global scale. Make farms self-sufficient in rearing eggs and chicks instead of exporting them internationally. The trend towards megafarms containing over a million birds must be stopped in its tracks.

To prevent the worst outcomes for this virus, we must revisit its primary source: the incubator of intensive poultry farms.

Diana Bell does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.

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A major cruise line is testing a monthly subscription service

The Cruise Scarlet Summer Season Pass was designed with remote workers in mind.

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While going on a cruise once meant disconnecting from the world when between ports because any WiFi available aboard was glitchy and expensive, advances in technology over the last decade have enabled millions to not only stay in touch with home but even work remotely.

With such remote workers and digital nomads in mind, Virgin Voyages has designed a monthly pass that gives those who want to work from the seas a WFH setup on its Scarlet Lady ship — while the latter acronym usually means "work from home," the cruise line is advertising as "work from the helm.”

Related: Royal Caribbean shares a warning with passengers

"Inspired by Richard Branson's belief and track record that brilliant work is best paired with a hearty dose of fun, we're welcoming Sailors on board Scarlet Lady for a full month to help them achieve that perfect work-life balance," Virgin Voyages said in announcing its new promotion. "Take a vacation away from your monotonous work-from-home set up (sorry, but…not sorry) and start taking calls from your private balcony overlooking the Mediterranean sea."

A man looks through his phone while sitting in a hot tub on a cruise ship.

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This is how much it'll cost you to work from a cruise ship for a month

While the single most important feature for successful work at sea — WiFi — is already available for free on Virgin cruises, the new Scarlet Summer Season Pass includes a faster connection, a $10 daily coffee credit, access to a private rooftop, and other member-only areas as well as wash and fold laundry service that Virgin advertises as a perk that will allow one to concentrate on work

More Travel:

The pass starts at $9,990 for a two-guest cabin and is available for four monthlong cruises departing in June, July, August, and September — each departs from ports such as Barcelona, Marseille, and Palma de Mallorca and spends four weeks touring around the Mediterranean.

Longer cruises are becoming more common, here's why

The new pass is essentially a version of an upgraded cruise package with additional perks but is specifically tailored to those who plan on working from the ship as an opportunity to market to them.

"Stay connected to your work with the fastest at-sea internet in the biz when you want and log-off to let the exquisite landscape of the Mediterranean inspire you when you need," reads the promotional material for the pass.

Amid the rise of remote work post-pandemic, cruise lines have been seeing growing interest in longer journeys in which many of the passengers not just vacation in the traditional sense but work from a mobile office.

In 2023, Turkish cruise line operator Miray even started selling cabins on a three-year tour around the world but the endeavor hit the rocks after one of the engineers declared the MV Gemini ship the company planned to use for the journey "unseaworthy" and the cruise ship line dealt with a PR scandal that ultimately sank the project before it could take off.

While three years at sea would have set a record as the longest cruise journey on the market, companies such as Royal Caribbean  (RCL) (both with its namesake brand and its Celebrity Cruises line) have been offering increasingly long cruises that serve as many people’s temporary homes and cross through multiple continents.

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As the pandemic turns four, here’s what we need to do for a healthier future

On the fourth anniversary of the pandemic, a public health researcher offers four principles for a healthier future.

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John Gomez/Shutterstock

Anniversaries are usually festive occasions, marked by celebration and joy. But there’ll be no popping of corks for this one.

March 11 2024 marks four years since the World Health Organization (WHO) declared COVID-19 a pandemic.

Although no longer officially a public health emergency of international concern, the pandemic is still with us, and the virus is still causing serious harm.

Here are three priorities – three Cs – for a healthier future.

Clear guidance

Over the past four years, one of the biggest challenges people faced when trying to follow COVID rules was understanding them.

From a behavioural science perspective, one of the major themes of the last four years has been whether guidance was clear enough or whether people were receiving too many different and confusing messages – something colleagues and I called “alert fatigue”.

With colleagues, I conducted an evidence review of communication during COVID and found that the lack of clarity, as well as a lack of trust in those setting rules, were key barriers to adherence to measures like social distancing.

In future, whether it’s another COVID wave, or another virus or public health emergency, clear communication by trustworthy messengers is going to be key.

Combat complacency

As Maria van Kerkove, COVID technical lead for WHO, puts it there is no acceptable level of death from COVID. COVID complacency is setting in as we have moved out of the emergency phase of the pandemic. But is still much work to be done.

First, we still need to understand this virus better. Four years is not a long time to understand the longer-term effects of COVID. For example, evidence on how the virus affects the brain and cognitive functioning is in its infancy.

The extent, severity and possible treatment of long COVID is another priority that must not be forgotten – not least because it is still causing a lot of long-term sickness and absence.

Culture change

During the pandemic’s first few years, there was a question over how many of our new habits, from elbow bumping (remember that?) to remote working, were here to stay.

Turns out old habits die hard – and in most cases that’s not a bad thing – after all handshaking and hugging can be good for our health.

But there is some pandemic behaviour we could have kept, under certain conditions. I’m pretty sure most people don’t wear masks when they have respiratory symptoms, even though some health authorities, such as the NHS, recommend it.

Masks could still be thought of like umbrellas: we keep one handy for when we need it, for example, when visiting vulnerable people, especially during times when there’s a spike in COVID.

If masks hadn’t been so politicised as a symbol of conformity and oppression so early in the pandemic, then we might arguably have seen people in more countries adopting the behaviour in parts of east Asia, where people continue to wear masks or face coverings when they are sick to avoid spreading it to others.

Although the pandemic led to the growth of remote or hybrid working, presenteeism – going to work when sick – is still a major issue.

Encouraging parents to send children to school when they are unwell is unlikely to help public health, or attendance for that matter. For instance, although one child might recover quickly from a given virus, other children who might catch it from them might be ill for days.

Similarly, a culture of presenteeism that pressures workers to come in when ill is likely to backfire later on, helping infectious disease spread in workplaces.

At the most fundamental level, we need to do more to create a culture of equality. Some groups, especially the most economically deprived, fared much worse than others during the pandemic. Health inequalities have widened as a result. With ongoing pandemic impacts, for example, long COVID rates, also disproportionately affecting those from disadvantaged groups, health inequalities are likely to persist without significant action to address them.

Vaccine inequity is still a problem globally. At a national level, in some wealthier countries like the UK, those from more deprived backgrounds are going to be less able to afford private vaccines.

We may be out of the emergency phase of COVID, but the pandemic is not yet over. As we reflect on the past four years, working to provide clearer public health communication, avoiding COVID complacency and reducing health inequalities are all things that can help prepare for any future waves or, indeed, pandemics.

Simon Nicholas Williams has received funding from Senedd Cymru, Public Health Wales and the Wales Covid Evidence Centre for research on COVID-19, and has consulted for the World Health Organization. However, this article reflects the views of the author only, in his academic capacity at Swansea University, and no funding or organizational bodies were involved in the writing or content of this article.

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