Cantor Fitzgerald, a well-known American financial services company, selected 14 biotech stocks in a recently released report and believes that these stocks are seriously undervalued and worth “re-examining.”
The Zhitong Finance App learned that Cantor Fitzgerald, a well-known American financial services company, selected 14 biotech stocks in a recently released report, and believes that these stocks are seriously undervalued and worth “re-examining.”
According to a report published by Cantor on May 6, the stock prices of all of these companies selected by it have fallen by more than 20% so far this year, and most of these companies' products have already established proof of concept.
In contrast, since the beginning of the year, the SPDR S&P Biotech ETF (XBI.US) has declined by only 1%, and the S&P 500 has risen nearly 10%. By the close of May 10, the SPDR S&P Biotech ETF had risen slightly by 1% over the past 12 months, and the S&P 500 index had risen 26%.
According to the report, companies that Cantor is optimistic about include Acadia (ACAD.US), Arrowhead Pharmacals (ARWR.US), Arvinas (ARVN.US), BridgeBio Pharma (BBIO.US), Cabaletta Bio (CABA.US), Denali Therapeutics (DNLI.US), 89bio (ETNB.US), Immunovant (IMVT.US) ), Disc Medicine (IRON.US), MoonLake Immunotherapeutics (MLTX.US), Marinus Pharmaceuticals (MRNS.US), Intellia Therapeutics (NTLA.US), Prothena (PRTA.US), and Rocket Pharmaceuticals (RCKT.US).
Arcadia:
First, as far as Acadia is concerned, Cantor said it is “cautiously optimistic” about the company's advanced drug candidates for Prader-Willi syndrome and Alzheimer's disease. Given its lucrative Nuplazid franchise, the agency labeled Acadia “good value for money.” Cantor's target price for Acadia is $37.
Arrowhead:
Cantor praised ArrowHead's RNAi platform for being “powerful.” The agency pointed out that Arrowhead shares fell because there was no fundamental news, although the company cut spending and removed funding pressure. Cantor said it believes Arrowhead “is based on only two late-stage assets being undervalued, and all of its other pipeline assets provide meaningful upside”.
Arvinas:
Additionally, the agency said that the recent decline in Arvinas's stock price “appears to have been driven by management changes and some speculation about revenue delays, but we don't think these are dangerous signs.” Cantor added that it believes the current price is a good entry point, and VepdeGestrant's upcoming Phase 3 data in a 2+ environment is “likely to be positive.”
BridgeBio:
Cantor said it was “surprising” that the company was on the decline given that BridgeBio solved the financing problem with minimal dilution, as well as other developments.
The agency said it believes BridgeBio's drug, Acoramidis, has a “clear path” with peak sales of over $1 billion each year because it provides “better” TTR stability than Pfe.US's tafamidis and is “unlikely to be beaten by ALNY.US's (ALNY.US) vutrisilan”.
Cabaletta:
Meanwhile, Cabaletta's stock has been under pressure, in part due to concerns that its production partners may “be targeted by the government,” although the company already has alternative suppliers.
Cantor notes that Cabaletta continues to advance its CD19 CAR-T therapy for autoimmune indications, adding that “investors are uneasy about some of the issues we ultimately think will be exaggerated.” The agency has set a target price of $50 for the unit.
Denali:
Cantor also believes Denali has “one of the most valuable biotechnology platforms”, particularly its blood-brain barrier drug delivery technology. The agency added that the FDA Biologics Evaluation and Research Center (CBER) “appears to be laying the red carpet for REGENXBIO (RGNX.US) Hunter's syndrome drug,” while the CDER regulator “brought Denali's drug DNL-310 to the clinical stage” despite its “excellent data set”, which made it “very disheartening.”
Cantor said CDER “hopes to determine within a year” that the DNL-310 “is suitable for speeding up approval and pushes it on the path” to becoming a potential $1 billion product. The agency has set a target price of $35 for the share.
89bio:
In addition to “external noise in the MASH sector,” 89bio's stock was also sold off for “no root cause”, Cantor said. Cantor added, “We think this is a good stock for long-term holders.” Because the company “basically has drugs in SHTG, F2/F3 MASH, and F4 MASH.” The agency's target price for the share is $29.
Immunovants:
For Immunovant, Cantor believes the company's peak sales potential for “pioneering and/or best-in-class” anti-FcRNS drugs is “underestimated.” Cantor added that the increase in earnings is expected to help close the gap between Immunnovant and competitors with larger market capitalization.
Disc Medicine:
Cantor said that judging from current valuations, Disc Medicine is also “worth watching.” “Considering the robust effects currently observed in the two trials,” Cantor still believes that its drug BitOpertin has development prospects. The line's target price is $85.
MoonLake Immunotherapeutics:
Cantor said MoonLake Immunotherapeutics has declined so much this year because the catalyst path has recently been “weak” and the merger and acquisition premium “has now basically disappeared.” The agency believes that based on its market opportunities in suppurative hidradenitis alone, MoonLake's valuation has been undervalued by more than 60%, and “other low-risk IL-17 indicators provide more upside.”
Marinus Pharmaceuticals:
Cantor said Marinus Pharmaceuticals experienced a “fundamental speed bump” in its third phase RAISE study and may now be “a candidate for acquisition and at a more attractive price compared to other companies.”
The agency believes that Marinus' Trust TSC study on tuberous sclerosis syndrome will be published in mid-November, which is “highly credible” and that positive data may drive approval in 2025. Cantor's price target is $13.
Intellia Therapeutics:
Meanwhile, Cantor said it could justify a higher valuation of Intellia Therapeutics based on the market potential of its hereditary angioedema program. Cantor added that before rival Ariram Pharmaceuticals' HELIOS-B study results are out (the study is expected to be published in late June/early July), they think Intellia is worth buying. Cantor's target price is $65.
Prothena:
According to Cantor, Prothena's “broad” portfolio is often overlooked by investors, who mainly focus on its Alzheimer's drug candidate PRX012. The agency also notes that Prothena's drug, Birtamimab, is expected to obtain Topline data from the Phase 3 study of AL amyloidosis from the fourth quarter of 2024 to the second quarter of 2025.
Rocket Pharmaceuticals:
As for Rocket Pharmaceuticals, Cantor said it remains the agency's first choice in small to medium cap biotech stocks “because the company has four development stages of gene therapy programs, which have established clear clinical proof of concept, a keen eye for opportunities, and the PKP2 gene therapy program is also emerging.”
Cantor pointed out that the PDUFA date for Rocket's gene therapy Kresladi is June 30, and if approved, a priority review certificate may be generated. Cantor's target price is $65.