The shortened week kicked off with one big crisis averted for now. During the long weekend, an agreement was reached between President Biden and House Majority Leader McCarthy that should go toward resolving the debt ceiling.
Oppenheimer’s Chief Investment Strategist John Stoltzfus expects a positive reaction to the progress being made to get the deal done. “In our view this portends well for the US and the markets even while it doesn’t eliminate the potential for angst near term as the agreement moves toward votes in the House and the Senate,” Stoltzfus said.
That elephant in the room aside, there’s plenty of economic data about to be released throughout this week that has the potential to offer insights into the state of the economy, including nonfarm payrolls and the ISM survey of manufacturing firms. “These will offer our first indication of the economy’s health in May,” notes Stoltzfus.
In the meantime, we wanted to take a closer look at two stocks earning a round of applause from Oppenheimer, with the firm’s analysts forecasting over 50% upside potential for each. We ran these tickers through the TipRanks database to get a fuller view of their prospects. Here’s the lowdown.
We’ll start with Mirati Therapeutics, a biopharma firm dedicated to developing targeted therapies for cancer patients. Based in San Diego, California, this company focuses on the development of small molecule drugs that specifically target genetic mutations associated with cancer. The approach involves identifying and inhibiting the key molecular drivers of cancer to disrupt tumor growth and improve patient outcomes.
Any bitoech’s goal is to get a drug approved and Mirati recently achieved that feat. Last December, the FDA granted accelerated approval for adagrasib (Krazati) as a 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 assessed in other indications. Upcoming catalysts include a readout of updated first-line NSCLC data for the combination of adagrasib with pembrolizumab in 2H23. Mirati is also on course to complete a supplemental New Drug Application (sNDA) for third-line and beyond colorectal cancer by the end of the year.
Another notable catalyst on the horizon involves MRTX1719, currently under assessment as a treatment for methylthioadenosine phosphorylase (MTAP)-deleted cancers. Initial clinical data from the Phase 1/2 clinical study is expected in 2H23.
Just recently, however, Mirati faced a setback with another one of its prospective treatments. Last week, the company announced that its lung cancer therapy sitravatinib, in combination with Bristol-Myers Squibb’s Opdivo, failed to reach the primary endpoint in a Phase 3 trial.
Shares duly fell in the subsequent trading session, but interestingly, its failure is seen as a positive by Oppenheimer analyst Jay Olson, who following the readout upgraded his rating from Perform (i.e., Neutral) to Outperform (i.e. Buy).
Explaining his stance, Olson said, “We believe the risk/reward profile of the stock has shifted to a more favorable position. We have been on the sidelines of this story for a while as we were uncertain about the clear differentiation of Krazati vs. Lumakras in the context of a widening launch gap and on the pipeline. With expectations on Krazati (esp. in the 1L) reset and a potential overhang from a late-stage program now removed, we think the stock is poised to Outperform with multiple catalysts in the next 12-18 months…”
“We believe negative SAPPHIRE outcomes and removal of sitravatinib make MRTX a much cleaner story for potential M&A with an attractive valuation,” the analyst summed up.
Olson’s price target now stands at $56, making room for 12-month gains of ~51%. (To watch Olson’s track record, click here)
The Street’s average price target is a bit higher, at $61.33, indicating a potential return of 65% over the upcoming year. All in all, the analyst consensus rates this stock a Moderate Buy, based on 8 Buys vs. 4 Holds. (See MRTX stock forecast)
We’ll stay in the biotech space for our next Oppenheimer-backed name. Corbus, a micro-cap biopharma company, is dedicated to assisting individuals overcome severe illnesses by introducing innovative scientific methods to well-established biological pathways.
In its pipeline, the company focuses on two distinct approaches in oncology. One of its leading 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 U.S. clinical study, which is scheduled to commence in mid-2024.
The company is also developing CRB-601, a potent and selective anti-αvβ8 integrin monoclonal antibody intended to block the activation of latent TGFβ within the tumor micro-environment (TME). Corbus is on track to submit an IND (investigational new drug) for CRB-601 in the second half of the year. Enrollment for a Phase 1 trial is expected to begin by the end of 2023.
While it’s still early days for the pipeline, the potential of CRB-701 is what drives Oppenheimer analyst Jeff Jones’ optimistic perspective.
“We see ‘701 as having the potential for a best-in-class profile benchmarked against SGEN’s PADCEV. ‘701 has the potential for superior safety and tolerability, in part due to proprietary linker technology. CRBP’s plan to utilize a CDx to identify patients and tumors with elevated Nectin-4 expression supports broad applicability, and potentially reduces clinical risk,” Jones opined.
Jones has high hopes indeed. Along with an Outperform (i.e., Buy) rating, his $22 price target implies the shares will climb 148% higher over the one-year timeframe. (To watch Jones’ track record, click here)
Micro-cap pharma stocks don’t always get a lot of analyst attention – they tend to fly under the radar. However, there are two analyst reviews on file here and both are to 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 runway toward ~41% upside. (See CRBP stock forecast)
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Disclaimer: The opinions expressed in this article are solely those of the featured analysts. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
