After a period of sustained losses, the stock market has been staging a comeback, with valuations across the board moving in one direction – higher. Between March 14 and March 23, the S&P 500 rose ~8%, while the NASDAQ was up ~12%.
Oppenheimer’s Chief Investment Strategist John Stoltzfus offers an explanation for the powerful rally: “In our view it wasn’t so much that investor sentiment had turned broadly positive last week but rather that enough investors started to see numerous positives among economic data points and corporate management commentaries and actions to offset a deluge of worries that have dogged the markets since early this year.”
In fact, the major equity benchmarks are now above the levels they were when Russia first invaded Ukraine, suggesting to Stoltzfus that “projections of the impact on the US from the hostilities in Eastern Europe have been overblown.”
Investors will be keeping an eye on a range of economic and macro data presented this week to see if that rally was just a one-off or if sentiment has truly turned. In the meantime, Stoltzfus continues to “favor equities in the current transitional environment.”
With this in mind, the stock analysts at Oppenheimer have made it easier to find equites that are particularly promising. They have pinpointed two names which they believe are ready to blast higher – in the order of at least 90%. Using the TipRanks database, we can get idea what the rest of the Street thinks lies in store for these stocks. Let’s take a closer look.
aTyr Pharma (LIFE)
We’re talking about at least 90% gains and the natural place to turn to for such mercurial returns will be the biotech space. aTyr Pharma is an early-stage biotech which aims to turn unique biological pathways into novel medicines for better patient outcomes.
The company is an expert in tRNA synthetase and NRP2 biology; the focus of its research is on the extracellular functionality and signaling mechanisms of tRNA synthetases. With more than 300 protein compositions patented, aTyr has established a global intellectual property estate directed to all 20 human tRNA synthetases and some associated signaling pathways.
aTyr has several candidates in the early stages of development but the lead program is efzofitimod — the first tRNA synthetase-derived and NRP2-targeting therapy.
The company is working on efzofitimod as a potential disease-modifying treatment for patients with serious inflammatory lung diseases with high unmet medical need. This includes interstitial lung disease (ILD), a category of rare immune-mediated lung diseases that can lead to lung fibrosis. Pulmonary sarcoidosis – a common form of ILD – was chosen as the first clinical indication.
In the United States, almost 200,000 people have pulmonary sarcoidosis, which accounts for more than 90% of all sarcoidosis cases. Efzofitimod has been designated orphan drug status for this indication.
Following strong Phase 1b/2a data, encouraging feedback from the patients and physicians and a positive EoP2 meeting with the FDA, aTyr plans on initiating a pivotal trial in pulmonary sarcoidosis (PS) in 3Q22.
The drug’s promise and the pipeline’s potential have piqued Oppenheimer’s Hartaj Singh’s interest. He writes: “Compelling Phase 1b/2a data, clinicians’ positive attitude to the data, and a high unmet need give us conviction that the next pivotal trial could move faster than expected. We highlight management execution and believe there is more upside to the story… As we layer in other ILDs in 2022, we see upside. And this is not yet coupled with opportunities to expand into additional therapeutic areas like cancer.”
Indeed, Singh sees “upside.” Backing his Outperform (i.e. Buy) rating is a $21 price target, which suggests room for 295% growth over the coming year. (To watch Singh’s track record, click here)
Four other analysts have chimed in with reviews recently and they are all positive, making the consensus view on this stock a Strong Buy. While not quite as optimistic as Singh’s objective, the $16.67 price target implies shares will still appreciate by a hefty 213% in the months ahead. (See LIFE stock forecast on TipRanks)
Alpine Immune Sciences (ALPN)
We won’t venture far a field for the next stock. Alpine Immune Sciences is a clinical stage biotech working on the discovery and development of innovative, protein-based immunotherapies. These target the immune synapse and are indicated for the treatment of cancer and autoimmune disorders. The company’s pipeline has programs in various stages of development, some in partnership with others and some wholly owned.
Of note is the Synergy study of Acazicolcept (ALPN-101), being developed in partnership with AbbVie with enrollment ongoing in the Phase 2 trial of patients with SLE (systemic lupus erythematosus).
There’s also ALPN-303 – being developed for multiple autoimmune and/or inflammatory diseases. A Phase 1 study evaluating the safety, tolerability, pharmacokinetics, pharmacodynamics, and immunogenicity of the drug in healthy volunteers began the enrollment process in 4Q21.
The other program of note is for ALPN-202 (davoceticept) which is currently in two separate clinical trials – NEON-1, as a monotherapy to treat advanced malignancies and NEON-2, in combination with pembrolizumab also indicated for adults with advanced malignancies.
The latter has encountered some issues recently. The FDA has put a partial clinical hold on the study following a patient’s death, attributed to cardiogenic shock, probably related to immune-mediated myocarditis.
Given myocarditis is a known risk associated with PD-1 inhibitors, Oppenheimer’s Mark Breidenbach estimates pembrolizumab is the “more likely culprit in this case.” The analyst expects it will take between 3 to 6 months until enrollment for the study resumes. In the meantime, there are other catalysts to look forward to.
“While Alpine is working to resolve a clinical hold on the NEON-2 trial, we expect to see updated dose-escalation data from NEON-1 at AACR, where we would view clean safety and evidence of dose-dependent activity in select tumor types as a win,” the analyst said. “By mid-year, we anticipate healthy volunteer data from ‘303, which could derisk Alpine’s plans to begin trials in SLE and additional autoantibody-related diseases in 2H. We believe Alpine is financed into early 2024, well beyond upcoming clinical catalysts.”
To this end, Breidenbach gives ALPN shares an Outperform (i.e. Buy) rating to go alongside a $17 price target. The implication for investors? Upside of ~95%. (To watch Breidenbach’s track record, click here)
Looking at the consensus breakdown, 3 Buys and no Holds or Sells have been issued in the last three months. Therefore, ALPN gets a Strong Buy consensus rating. Based on the $19 average price target, shares could gain ~118% in the coming months. (See ALPN 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.
