In addition to helping the world combat the deadly COVID-19 virus, biotech companies are now working on producing viable medications and cures to treat other diseases by integrating advanced technologies. Furthermore, with an aging population heightening the demand for healthcare, the sector is poised to witness tremendous growth in the foreseeable future.
Also, the recently identified highly transmissible COVID-19 omicron variant could attract even more investor interest in the industry. The global biotechnology industry is projected to reach $2.44 trillion by 2028, registering a 15.8% CAGR.
Given the industry's solid growth prospects, Wall Street analysts expect quality biotech stocks Esperion Therapeutics Inc. (ESPR) and CTI BioPharma Corp. (CTIC), which are currently trading at less than $10, to deliver significant upside in the coming months. So, we think these stocks could be great additions to one's watchlist.
Click here to checkout our Healthcare Sector Report for 2021
Esperion Therapeutics Inc. (ESPR)
ESPR is an Ann Arbor, Mich.-based pharmaceutical company that develops and commercializes medicines in the United States and internationally to treat patients with elevated low-density lipoprotein cholesterol. The company has a strategic collaboration with Daiichi Sankyo Europe GmbH and Serometrix to in-license its oral, small molecule PCSK9 inhibitor development.
For the third quarter, ended September 30, 2021, ESPR's revenue increased 275.9% from the year-ago value to $14.41 million. And its operating expenses declined 16.9% year-over-year to $70.15 million. The company's net cash from financing activities surged 75.2% for the nine months ended September 30, 2021, to $54.81 million, while its cash and cash equivalents came in at $103.67 million over this period.
Analysts expect ESPR's EPS to increase 58.2% next year. A $79.69 million consensus revenue estimate for next year represents a 2.4% increase over the period.
Of the seven Wall Street analysts that have provided ratings for the stock, four rated it Buy, and one rated it a Hold. Closing yesterday's trading session at $5.30, the $13.67 average analyst price target represents a potential 157.9% upside.
CTI BioPharma Corp. (CTIC)
CTIC is a biopharmaceutical company based in Seattle, Wash., which specializes in acquiring, developing, and commercializing innovative targeted medicines for blood-related malignancies. The company has a license and collaboration agreement with Teva Pharmaceutical Industries Ltd.; S*BIO Pte Ltd.; and Vernalis (R&D) Limited.
In October, CTIC released topline data from its PRE-VENT trial (NCT04404361) of pacritinib in hospitalized patients with severe COVID-19. PRE-VENT, a randomized, double-blind, placebo-controlled multicenter research project, evaluated pacritinib/standard of treatment with placebo/standard of care in hospitalized patients with severe COVID-19, including patients with and without cancer.
During the six months ended June 30, 2021, CTIC's cash and cash equivalents increased 77.9% year-over-year to $71.88 million. Its net cash from investing activities grew 380% to $12 million over this period. The company's net cash from financing activities amounted to $53.86 million, and its EPS is expected to increase 23% next year.
All the four analysts that have provided ratings for the stock rated it Buy. The $5.55 consensus price target represents a 211.8% potential gain from its last closing price of $1.78.
Click here to checkout our Healthcare Sector Report for 2021
ESPR shares fell $0.03 (-0.57%) in premarket trading Friday. Year-to-date, ESPR has declined -79.62%, versus a 25.95% rise in the benchmark S&P 500 index during the same period.
About the Author: Pragya Pandey
Pragya is an equity research analyst and financial journalist with a passion for investing. In college she majored in finance and is currently pursuing the CFA program and is a Level II candidate.
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