Biotech Bounces Back; M&A Eyed

January 14, 2016 12:49 PM EST
Get Alerts NVAX Hot Sheet
Price: $237.27 +2.14%

Rating Summary:
    8 Buy, 4 Hold, 2 Sell

Rating Trend: Up Up

Today's Overall Ratings:
    Up: 0 | Down: 0 | New: 12
Trade Now! 
Join SI Premium – FREE

Get inside Wall Street with StreetInsider Premium. Claim your 1-week free trial here.

After a brutal start to the new year, biotech stocks are higher across the board today. In addition to a snap-back rally and short covering, helping is a note from Piper Jaffray's Edward Tenthoff discussing expected M&A in the sector.

"We expect strong balance sheets and low cost of capital at Big Pharma and Biotech coupled with lowered valuations of potential targets to accelerate the pace of M&A," Tenthoff said.

He blamed the recent weakness on macro head-winds, soft Big Cap guidance and election concerns.

While Tenthoff didn't get too specific on targets he did highlight his top pick Novavax (NASDAQ: NVAX), which has Phase III elderly RSV data this fall. "Recent pull back in share price and/or positive Phase III RSV data could draw multiple take out bids from larger vaccine players," he said.

Other stocks he likes, although not just on M&A include: Vertex Pharma (NASDAQ: VRTX) for the ORKAMBI launch and return to sustainable profitability; Alnylam Pharma (NASDAQ: ALNY) ahead of data from 11 clinical trials this year including additional ALNAT3 hemophilia data, ALN-CC5 data in PNH patient in mid'16 and ALN-AS1 data towards year-end; Sarepta Therapeutics (NASDAQ: SRPT) ahead next week's FDA review of eteplirsen with potential for Accelerated Approval by the February 26th PDUFA data; Celyad SA (NASDAQ: CYAD) ahead of Phase III CHART-1 heart failure data and Phase I CAR-NKG2D cancer data in June; Vitae Pharmaceuticals (NASDAQ: VTAE) which is due to report 4-week VTP-43742 psoriasis data soon; and Medgenics (NYSE: MDGN) which will report NFC-1 ADHD data this year.

Serious News for Serious Traders! Try Premium Free!

You May Also Be Interested In

Related Categories

Analyst Comments, Mergers and Acquisitions, Rumors

Related Entities

Piper Jaffray, Edward Tenthoff, PDUFA