This weekend marks the end of summer in most minds. And investors looking for a post-summer portfolio boost should turn their eyes to these two stocks in the biotech space.
Both are in clinical trials for some very promising new drugs, and analysts rate both stocks a Buy with big upside ahead.
Here’s what you need to know about these two biotech stocks.
CymaBay Therapeutics (NASDAQ: CBAY)
You’ve likely never heard of CymaBay Therapeutics (NASDAQ: CBAY).
This biotech is on the cutting-edge in the treatment of liver disease, with all eyes on its primary product candidate, seladelpar. Seladelpar is a treatment for primary biliary cholangitis (PBC), and phase 3 testing of the treatment for PBC is on target to begin by the end of this year.
So far, this treatment has come with a better safety profile compared to existing treatments, and Oppenheimer analyst Jay Olson says, “We estimate that seladelpar can become the standard of care for second-line treatment of PBC.”
Seladelpar is also in trials to treat non-alcoholic fatty liver disease (NASH). NASH is estimated to impact more than 16 million patients in the U.S., so the approval of seladelpar in the treatment of the disease could deliver huge upside for the stock. Phase 2b trials of sleadelpar in the treatment of NASH are already underway.
The average 12-month price target for CBAY is $21.87, or 64% higher than today’s prices. Earlier this month, Piper Jaffray boosted its price target for the stock to $30 – 130% higher than Thursday’s closing price.
Global Blood Therapeutics (NASDAQ: GBT)
Global Blood Therapeutics (NASDAQ: GBT) is another name you’ve likely never heard.
This clinical-stage company is focused on sickle cell disease, and its Phase 3 asset, GBT440, looks likely to find regulatory and commercial success in treating the disease, with Breidenbach saying the drug could “substantially improve the standard of care in this indication.”
The stock is up 71% from this time a year ago, and 24.5% year-to-date. Last week, GBT announced an exclusive worldwide licensing agreement with Roche (OTC: RHHBY) for the development and commercialization of its inclacumab treatment, a monoclonal antibody against P-selectin, which GBT plans to develop as a treatment for vase-occlusive crises (VOC) in patients with sickle cell disease.
The company is in a solid cash position, reporting cash and cash equivalents of $514 million in its Q2 earnings. R&D expenses for Q2 were $31.6 million, and G&A expenses were $10.9 million.
Analysts’ average price target over the next 12 months is $82.57, suggesting possible upside of 68.5%. But just last week, HC Wainwright issued a Buy rating on GBT with a price target of $125 – 155% higher than the price today.