The stock market has always been a volatile environment – but the last several weeks have seen an increase in that phenomenon. The bull market of 2021 shifted into reverse in January, and increased intraday swings, along with a partial reversal of losses, have been the order of the day in February. Unsurprisingly, much of the market’s currently unsettled character can be attributed to set of conflicting currents that are pushing in multiple directions at once.
A new report on market and economic conditions from Oppenheimer lays out the situation. Chief asset manager John Stoltzfus writes: “In our view many things are actually getting better even as a number of problems that appear quite vexing seem even to appear to worsen. Consider the huge upside surprise in the jobs numbers for January and the massive upside revisions for December reported last Friday and their implications for economic growth ahead as a positive and the immediate challenge for monetary policy makers this presents near term."
With Stoltzfus’ outlook in mind, we took a closer look at two stocks Oppenheimer is backing. The firm’s analysts see over 60% upside potential in store for each. We used TipRanks’ database to find out what the rest of the Street has to say.
Intellia Therapeutics (NTLA)
The first Oppenheimer pick we’re looking at is Intellia, a clinical stage biotherapeutic company founded in 2014 to develop new drug candidates for genetic diseases, specifically using CRISPR gene editing technology. Today, the company has an active and varied research pipeline, featuring both in vivo and ex vivo research tracks and developing therapeutic agents to treat a wide range of conditions, from hemophilia to myeloid leukemia to sickle cell disease to angioedema. The company works both independently and in partnerships with other biotech firms.
There are several important milestones lying ahead in the company's clinical programs. Going forward in 2022, the company expects to continue its ongoing development of NTLA-2001, a treatment for transthyretin (ATTR) amyloidosis. This drug candidate is potentially a one-dose agent and is undergoing a Phase 1 clinical study. Intellia expects to present data from that study during 1Q22.
The company also expects to see progress on NTLA-2002, an investigation therapy for hereditary angioedema. This drug candidate is in early-stage clinical testing, and is undergoing a first-in-human study. Interim data is scheduled for release in 2H22.
Finally, in a third upcoming catalyst, Intellia is anticipating progress on NTLA-5001. This is the company’s most advanced program, currently in a Phase 1/2a study as a treatment for acute myeloid leukemia. Intellia will be giving an update on the timing of the data readouts later this year.
Intellia isn’t just relying on its drug development pipeline. The company is actively moving to expand its capabilities – and early this month it announced the acquisition of Rewrite Therapeutics. Rewrite is a private biotech firm whose work involves developing new DNA writing technologies. Intellia’s acquisition adds Rewrites tech to its own gene editing programs. The move was worth $160 million, transacted in cash and stock.
Oppenheimer’s Jay Olson covers Intellia, and he has upgraded his rating on the shares from Neutral (i.e. Hold) to Outperform (i.e. Buy). Backing his stance, Olson writes: "Our belief [is] that the current share price represents an attractive entry point with several catalysts ahead. We're optimistic about a clinical update on NTLA-2001 in 1Q22 from two higher-dose cohorts and longer follow-up building on the initial results... Meanwhile, progress made on gene insertion looks promising as the AATD and hemophilia programs continue advancing. Our thesis on NTLA-2001 is increasingly bullish although we recognize potential commercialization challenges. We consider NTLA underappreciated..."
These comments support Olson’s $150 price target on NTLA, a target that suggests the stock has room to gain ~61% this year. (To watch Olson’s track record, click here)
Overall, Intellia is a leader in its research field, and Wall Street has been lining up behind it – the firm has 11 recent analyst reviews which include 10 Buys against a single Hold, for a Strong Buy consensus rating. The average price target is a bullish $158.88, implying a one-year upside of ~70% from the current share price of $93.25. (See NTLA stock forecast on TipRanks)
PDS Biotechnology (PDSB)
The next stock on Oppenheimer's radar is another biopharma company, PDS Biotechnology. PDS has a research program focuses on immuno-oncology, the science of using the body’s own immune system to combat various cancers, as well as having applications to infectious diseases. The company has a proprietary platform, Versamune, which it uses in drug development.
PDS’s leading drug candidate is PDS0101. This investigational drug is under development to treat cancers linked to or caused by the human papilloma virus, HPV. It’s now known that a wide range of cancers are linked to viral infections, and HPV is one of the chief culprits. This common virus has been connected to cancers of the head and neck, and the genital areas. In women, HPV is linked to cervical cancers. PDS has clinical-stage research programs evaluating PDS0101 as a treatment on all three of these tracks.
In earlier clinical work, PDS0101 demonstrated efficacy in tumor regression. The big news on the drug candidate now comes from the Phase 2 VERSATILE-002 trial, which evaluated the drug in combination with Keytruda as a treatment for HPV-associated head and neck cancer. On February 2, the company announced that the trial had met its preliminary objective response benchmarks. The company is now moving to complete the study, with full enrollment of 54 patients.
PDS takes its intellectual property seriously, and in January the company announced that it had been granted a new patent on part of the PDS0101 technology.
Analyst Leland Gershell, in his write-up on PDS for Oppenheimer, stresses the importance of the recent Phase 2 update for PDS0101, writing: “With PDSB's Phase 2 trial of PDS0101 w/Keytruda in recurrent/metastatic head and neck cancer having achieved its pre-specified threshold of at least four objective responses (OR) among the first 17 evaluable checkpoint inhibitor-naive (1st line) patients, this arm will now progress to full enrollment (N=54). The trial's CPI-refractory arm (2nd-3rd line) continues to accrue, and we expect both arms to complete enrollment by ~YE."
"We see PDSB as one among a handful of small cap stocks in our universe for which a broader market recovery could be particularly supportive,” Gershell summed up.
To this end, Gershell gives PDSB an Outperform (i.e. Buy) rating, along with a $25 price target implying a robust upside potential of 309% by the end of this year. (To watch Gershell’s track record, click here)
All in all, other analysts echo Gershell's sentiment. 3 Buys and no Holds or Sells add up to a Strong Buy consensus rating. Shares are trading for $6.11, and the $18.50 average target suggests ~203% upside from that level. (See PDSB stock forecast on TipRanks)
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Disclaimer: The opinions expressed in this article are solely those of the featured analysts. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment