Health and Healthcare

What Wedbush Is Watching in Biotechs Amid Coronavirus Crisis

Chris Lange

Published: April 6, 2020 10:39 am

The COVID-19 pandemic has changed normal operations for companies across the world as they cope with resource limitations, health precautions and other challenges. While biotechnology as a whole may be better insulated from the market volatility, it would only be reasonable that biotech companies, too, will make adjustments to react with the current climate.

It is safe to say the markets as a whole are in bear market territory now, and some are suggesting this will be a recession. Some of the big bears are even calling this the beginning of a depression. Again, the quickest and most effective solution to this situation is to find a vaccine.

China first faced the outbreak of the novel coronavirus, and now it has spread across the world. Global infections of roughly 1.29 million people have been reported. There are currently 945,000 active cases of the coronavirus and over 342,000 closed cases. Of those with outcomes, nearly 272,000 of those infected have recovered, while over 70,000 deaths have been reported.

In a recent report from Wedbush Securities, the boutique brokerage firm recaps the COVID-19 impact on its coverage universe. Here, 24/7 Wall St. has picked out some of Wedbush’s top picks within the sector.

Avrobio Inc. (NASDAQ: AVRO) was reiterated with an Outperform rating and a $36 price target. The firm noted that dosing is temporarily paused in its Phase 1/2 study in Gaucher, and the timing of ongoing data collection for dosed patients in its Fabry disease study could be affected by COVID-19.

Fate Therapeutics Inc. (NASDAQ: FATE) was reiterated as Outperform with a $41 price target. The company expects potential delays or disruptions in patient enrollment and site initiation, and this likely will affect timelines of ongoing clinical trials. The firm remains on track to submit FDA Investigational New Drug (IND) applications for FT538 and FT819 in the second quarter of 2020.

Kiniksa Pharmaceuticals Ltd (NASDAQ: KNSA) was reiterated as Outperform with a $30 price target. Kiniksa recently reported that mavrilimumab is now actively being investigated as a therapy for COVID-19-related pneumonia and hyper-inflammation.

Mersana Therapeutics Inc. (NASDAQ: MRSN) was reiterated as Outperform with a $12 price target. The company reaffirmed its second-quarter update for interim data from the Phase 1/2 XMT-1536 expansion study, though noted that enrollment in the study has slowed and may be slower in the future.

Novocure Ltd. (NASDAQ: NVCR) was reiterated with a Neutral rating and an $80 price target. Novocure noted that enrollment of patients in six ongoing clinical studies continues, but clinical trial site expansion is delayed. The company expects shifts in the timing for enrollment and study completion by multiple quarters.

Orchard Therapeutics PLC (NASDAQ: ORTX) was reiterated as Outperform with a $22 price target. The firm noted the regulatory decision on MAA application for OTL-200 in metachromatic leukodystrophy is still expected in 2020, with the commercial launch in the first half of 2021. The expected FDA biologics license application (BLA) submission for OTL-200 is now expected in the first half of 2021. It was previously expected in late 2020. Also, regulatory filing for the United States and European Union remain on track for OTL-103 to occur in 2021.

Synlogic Inc. (NASDAQ: SYBX) was reiterated as Outperform with a $6 price target. The company said that it would delay enrollment for planned Phase 2 study of SYNB1618 in phenylketonuria. Also, there likely will be slower enrollment of new subjects in Phase 1 study of SYNB1891 in advanced solid tumors.

TCR2 Therapeutics Inc. (NASDAQ: TCRR) was reiterated as Outperform with a $25 price target. TCR2 noted that the exact timing or content of interim updates for Phase 1 portion of multiple studies may be affected.