A new report from biotech and health care boutique Leerink focuses on stocks with key data readouts coming soon and a group of large cap names that could see reimbursement and public exchange profitability information reported.
Aetna Inc. (NYSE: AET) makes the list and trades at just touch over 14 times earnings. The company is one of the nation’s leading diversified health care benefits companies, serving an estimated 44 million people while offering a broad range of traditional, voluntary and consumer-directed health insurance products and related services, including medical, pharmacy, dental, behavioral health, group life and disability plans, and medical management capabilities.
Aetna is one of a number of stocks involved in the public exchanges set up in the Affordable Care Act. Its reporting on plan profitability will be a key for analysts tracking the stock. Investors are paid a 1.1% dividend. The Thomson/First Call price target for the stock is at $86.53. Aetna closed Monday at $82.45 a share.
Amicus Therapeutics Inc. (NASDAQ: FOLD) has been on fire, and was a featured stock recently with very large insider buying. The Leerink team is very positive on the outcome of the Phase 3 study 012 data for Amigal. They assign 75% and 50% probabilities of success in the European Union and the United States for approval, up from 20% before. The consensus price target for the stock is $6. Amicus closed Monday at $3.90.
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Genomic Health Inc. (NASDAQ: GHDX) is a company that could benefit from the removal of a reimbursement overhang for its OncotypeDx breast cancer test. Medicare is expected to release a preliminary reimbursement rate in late September, with a final determination by November. The consensus price target for the stock currently stands at $30.17. Shares closed Monday at $27.33.
Humana Inc. (NYSE: HUM) has a unique earnings profile and is the closest thing in the space to a Medicare Advantage pure play with about 60% of operating earnings levered to this segment and a strong market position. Future growth should come from a combination of baby boomers (turning 65 at the rate of 8,000 per day for the next 18 years) and continued market share gains and potential shifts from employers to Medicare.
The company is another that will be closely watched for revenues and profitability from the public exchanges. Investors are paid a 0.95 dividend. The consensus price target is pegged at $124.20, but Humana closed Monday at $128.27.
Intercept Pharmaceuticals Inc. (NASDAQ: ICPT) has been a gigantic name, and it recently announced that its FLINT data is likely to be released in August, delayed from July. Many of the top biotech analysts on Wall Street believe the data could represent a significant positive catalyst for the stock.
The Leerink team has become increasingly cautious on the stock as MEDACorp specialist feedback suggests that robust improvements in fibrosis are required to offset their concerns about plasma lipids and excess cardiovascular events. The consensus price target is a staggering $460.40. Intercept closed Monday at $237.52.
Kindred Biosciences Inc. (NASDAQ: KIN) lead product candidates are CereKin (diacerein) for the treatment of osteoarthritis pain and inflammation in dogs, AtoKin (fexofenadine) for the treatment of atopic dermatitis in dogs, and SentiKin (flupirtine) for the treatment of postoperative pain in dogs. The Leerink analysts assign an 85% probability of success, and they see the CereKin on track for submission later this year. The consensus price target is $26.40. Shares closed Monday at $17.24.
Puma Biotechnology Inc. (NYSE: PBYI) is a stock many on Wall Street view as having multiple catalysts. A cocktail of drugs containing Puma’s neratinib given before surgery eliminated evidence of cancer in the breast and lymph nodes in 55.6% of women, compared with 32.6% of those given standard drug therapy, the company said in a recent statement. The improvement was seen in women with cancer fueled by the HER-2 protein and was not definitive, particularly in cancers also sensitive to the hormone estrogen.
The Leerink analysts think that there is a realistic chance for success for the neratinib Phase 3 data from the legacy trial with Pfizer, which could come any day now. The consensus price target is $122.67. Puma closed Monday at $69.15.
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Novartis A.G. (NYSE: NVS) LCZ696 data is one of the top pipeline prospects, and the Leerink team is bullish on the outcome. LCZ696 is an investigational combination drug consisting of two antihypertensives (blood pressure lowering drugs), valsartan and AHU-377. The Wall Street buzz is the drug could be a blockbuster for Novartis. Investors receive a 3% dividend. The consensus price target for the stock is $93.56. Novartis closed Monday at $90.29.
Walgreen Co. (NYSE: WAG) revenue from established stores climbed strongly the first half of this year, higher than analysts expected, as the nation’s largest drugstore chain doled out more flu shots and absorbed a smaller revenue hit from generic drugs. The pharmacy giant is expected to benefit from the increased drug benefits in some plans.
The Leerink team believes a late July or early August investor call could provide clarity on forward financial goals, and the timing of the remaining Alliance Boots purchase. Investors are paid a 1.7% dividend. The consensus price target is $77.76. Shares closed trading Monday at $73.58.
Binary events can go either way, and stocks can react violently if the outcomes are negative. For stocks that are a one-trick pony, it can mean the end. Investors need a very high risk tolerance to add most of these names to their portfolios. With that in mind, some of these top names could be poised for a big move higher.
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