Citi Says Minerva, PTC Among Biotechs to Watch in Second Half
Citi Says Minerva, PTC Among Biotechs to Watch in Second Half
(Bloomberg) -- Eloxx Pharmaceuticals Inc., Medicines Co., Minerva Neurosciences Inc., NGM Biopharmaceuticals Inc. and PTC Therapeutics Inc. are Citi‘s top five picks for small-cap biotechs with catalysts over the next few months.
Citi analysts led by Joel Beatty rate all five companies a buy. Shares could double if results from Eloxx’s mid-stage studies in cystic fibrosis and nephropathic cystinosis -- a rare kidney disease -- are positive, Citi predicted in a note to clients.
An experimental cholesterol drug inclisiran from Medicines Co. has an 80% chance of succeeding in a late-stage study expected in September, Beatty wrote. Shares of a company with a competing therapy, Esperion Therapeutics Inc, may fall 7% if inclisiran is successful, though the small-cap could advance 25% if inclisiran fails.
The stock of Minerva Neurosciences may more than triple if a study attacking the negative symptoms of schizophrenia, like social withdrawal or apathy, is able to succeed, Citi said. Results are expected in the fourth quarter.
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Beatty’s enthusiasm for NASH name NGM Biopharmaceuticals hasn’t waned since he started coverage in April. “Lead agent NGM282 has shown the largest liver fat reduction of any NASH drug we’re aware of,” he wrote suggesting a $10 upside with a $6 downside for the stock.
For PTC Therapeutics, the focus is on results from Roche-partnered medicine risdiplam in spinal muscular atrophy. An approval of the drug may drive shares up $6, without approval the stock may fall $10.
Large-cap biotechs need deals to bolster their pipelines. Data that derisks experimental medicines may make these small-caps targets for future acquisitions.
--With assistance from Gaurav Panchal.
To contact the reporter on this story: Cristin Flanagan in New York at cflanagan1@bloomberg.net
To contact the editors responsible for this story: Catherine Larkin at clarkin4@bloomberg.net, Lisa Wolfson
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