Needless to say, the biotech world has had a very difficult year. Even the biggest and the best companies, many of which trade cheaper than big pharmaceutical companies, have suffered as investors have fled the sector. Much of the blame for the poor showing is the very shrill election year rhetoric from politicians over drug pricing, and while there is always an argument for lower prices, taking down an entire industry is extreme.

Two new reports from the analysts at Stifel focus on two companies that not only have data that could prove to be huge, but that have both been absolutely hammered over the past year, offering aggressive accounts the best entry points in some time. These stocks are very speculative, and though rated Buy, they are only appropriate for very aggressive portfolios.

Cempra

This top biotech has been absolutely eviscerated since printing highs last summer. Cempra Inc. (NASDAQ: CEMP) is a clinical-stage pharmaceutical company focused on developing antibiotics to meet critical medical needs in the treatment of bacterial infectious diseases. Cempra’s two lead product candidates are currently in advanced clinical development. Solithromycin (CEM-101) has successfully completed two Phase 3 clinical trials for community-acquired bacterial pneumonia, and new drug applications for the intravenous and oral capsule formulations have been submitted to the FDA.

Solithromycin is licensed to company’s strategic commercial partner Toyama Chemical, a subsidiary of Fujifilm Holdings, for certain exclusive rights in Japan. Solithromycin is also in a Phase 3 clinical trial for uncomplicated urogenital urethritis caused by Neisseria gonorrhoeae or chlamydia.

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The company recently released very positive results for a Phase 2, multi-center, randomized, double-blind study that was conducted by Toyama to evaluate the efficacy, safety and pharmacokinetics of solithromycin in Japanese patients. The Stifel analysts view the release of oral solithromycin data demonstrating numerically superior efficacy to levofloxacin in the Phase 2 study conducted by Toyama as a very positive result.

The Stifel price target for the stock is an incredible $51. The Thomson/First Call consensus price target is $38.91, and the stock closed most recently at $17.89 per share.

Relypsa

This biopharmaceutical company also has been hammered but has big upside potential, according to the Stifel analyst. Relypsa Inc. (NASDAQ: RLYP) is focused on the discovery, development and commercialization of polymeric medicines for patients with conditions that are often overlooked and undertreated and can be addressed in the gastrointestinal tract.

The company’s first medicine, Veltassa (patiromer) for oral suspension, was developed based on Relypsa’s rich legacy in polymer science. Veltassa is approved in the United States for the treatment of hyperkalemia. Veltassa has intellectual property protection until 2030 in the United States and 2029 in the European Union.

In a huge win for the company, and a big surprise for many, AstraZeneca’s competing drug to Veltassa, ZS-9, which many thought would gain approval but have a severe black box warning, was not approved by the U.S. Food and Drug Administration (FDA). This incredible and unexpected setback is fantastic news for Relypsa. With AstraZeneca out of the game for now, Relypsa has the commercial market, with estimated peak sales forecasts of about $1 billion, all to itself.

Relypsa also announced this week that the company has submitted a supplemental New Drug Application (sNDA) to the FDA requesting label changes for Veltassa for oral suspension based on results of 12 Phase 1 drug-drug interaction studies in healthy volunteers.

Stifel has a huge $36 price target for the stock, while the consensus price objective is $31.33. The stock closed Thursday at $16.60 but opened Friday at $20.63, up more than 20%.

Two big opportunities for aggressive investors. There are also substantial risks should the outcomes not play out favorably. With that in mind, some smaller speculative positions could be the right play for aggressive risk tolerant accounts.

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