The latest Consumer Price Index (CPI) figures showed that inflation is still easing, having dropped for the 6th consecutive month. The CPI for December rose by 6.5% from the same period a year ago and fell by 0.1% compared to November, thereby meeting Street expectations.
There are still areas of concern, though, such as services inflation, which might put a spanner in the works for investors hoping the latest readout will cause the Fed to put the brakes on its rate-hiking endeavors. Additionally, there are still plenty of concerns about the prospect of a recession.
However, one financial expert thinks these are overblown. Investment strategist Ed Yardeni recently said the “outlook for the world economy is actually improving.” In fact, Yardeni thinks the bottom for the stock market has been in since October 12. “That was the end of the bear market,” he says, “and we‘re back in a bull market.”
If Yardeni is right, then now is likely a propitious time for investors to buy in.
With this in mind, we’ve dipped into the TipRanks database and found two names that are expected to push higher in the months ahead – by the order of 80% or more. And the cherry on top – all three are rated as Strong Buys by the analyst consensus. Let’s see why the analysts are so keen on these names right now.
Ultragenyx Pharmaceutical Inc. (RARE)
We’ll start with Ultragenyx Pharmaceutical, a biotech company focused on developing and bringing to market treatments for rare and ultra-rare genetic diseases.
The company has several products on the market, including Crysvita, a therapy for X-linked hypophosphatemia (XLH) and Dojolvi, a prescription medicine that treats long-chain fatty acid oxidation disorders (LC-FAOD).
Additionally, the company boasts a diverse clinical pipeline based around three rare disease research paths: bone/endocrine; metabolics; and CNS/muscle.
These include UX111, an AAV9 gene therapy Ultragenyx, which is indicated to treat Sanfilippo syndrome type A (MPS IIIA). Based on interim data from the ongoing, pivotal Transpher A study, the company anticipates talking to the FDA in 1H23 regarding the filing route.
There’s also the Phase 3 study of DTX401 taking place. This is an AAV8 gene therapy designed to treat glycogen storage disease type 1a (GSD1a).
Then there’s GTX-102, an antisense oligonucleotide (ASO) for Angelman syndrome that the company procured via last year’s GeneTx acquisition. An update from the expansion cohorts of a Phase 1/2 study is anticipated this year.
This is the drug that H.C. Wainwright analyst Ed Acre thinks investors are most focused on, believing it to be the “main value driver for the stock.”
The shares lost 46% during 2022, and Acre thinks that is “due partly to lingering doubts on GTX-102’s safety and how to interpret data in very small ‘n’ and across multiple assessments.”
“However,” the 5-star analyst went on to explain, “we believe the determination of the optimal dose, with ‘substantial data’ on GTX-102 (likely in terms of both sample size and duration post-treatment) expected next year (2023) could represent a major de-risking event, which we anticipate could occur before key competitive readouts from ION582 and rugonersen.”
“Despite the unflattering stock chart,” the analyst concluded, “as we look across the broad pipeline, we see substantial value-creation potential that creates an excellent entry-point, in our view.”
To this end, Acre rates RARE shares a Buy, backed by an $82 price target. This figure reflects his belief in ~85% upside heading into next year. (To watch Acre’s track record, click here)
It’s not as if Acre is alone in his bullish take. With 11 Buy ratings and just 1 Hold, the consensus view here is a Strong Buy. At 86.58, the average target represents one-year upside of ~95%. (See RARE stock forecast)
MediWound Ltd. (MDWD)
The next stock in our sights is MediWound, a biopharmaceutical company that leverages its enzymatic technology platform to develop next-generation therapies for severe burns, wounds, and tissue repair.
The big recent news on the Mediwound front is the one all biotechs hope to achieve. At the end of December, the company announced that the FDA has given its nod of approval for NexoBrid, the company’s solution for the removal of eschar in adults with deep partial-thickness and/or full-thickness thermal burns. The U.S. commercial launch is expected to take place in 2Q23, and the approval triggers a $7.5 million milestone payment from Vericel. NexoBrid is already approved in 43 countries.
As for the pipeline, the company is also working on EscharEx, a topical agent being advanced for the debridement of chronic and other hard-to-heal wounds. The treatment had positive results in Phase 2 studies, and once discussions with the regulators are done, the company intends on initiating a pivotal Phase 3 trial in 1H23.
There’s also MW005, a treatment of low-risk Basal Cell Carcinoma (BCC). Mediwound recently announced positive data from its Phase I/II study and patients are still being enrolled, with more results anticipated this year.
Maxim analyst Michael Okunewitch lays out the bull-case for Mediwound, noting: “We expect revenue for NexoBrid to build, particularly with a U.S. approval, and see this opportunity alone as a valuation catalyst, with the higher value opportunity represented by EscharEx in the ~$2B chronic wound market.”
“MediWound has ~$35M in cash on the balance sheet and combined with the $7.5M milestone from partner Vericel, the company should have cash runway into 2025 and be well-positioned to execute on its clinical and commercial strategy to drive value for investors,” the analyst added.
These comments underpin Okunewitch’s Buy rating, while his $25 price target suggests the shares could surge ~93% over the coming year. (To watch Okunewitch’s track record, click here)
Looking at the consensus breakdown, based on Buys only – 4, in total – the analysts view this stock as a Strong Buy. The forecast calls for one-year gains of a hefty 172%, considering the average target stands at $34. (See MDWD stock forecast)
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Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.