Biotech Just Got Exciting Again

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ByG. Dautovic
September 25, 2019

Three biotech companies are making quite a commotion on Wall Street.

Biotech stocks are surging following well-publicized successes in treating deadly diseases. Biotech offerings are notoriously volatile, but analysts at Global Market Insights say the market is set to grow up to $775 billion by 2024.

TipRanks has identified three smart investments at the center of the boom. Moderna, Cytokinetics, and Atara Biotherapeutics have already risen in recent weeks. TipRanks says smart investors should consider adding them to their portfolios.

What do these companies do exactly, and why are they worth attention from investors?

Moderna Inc.

Leading the pack is Moderna, a biotech company whose stocks skyrocketed 10% this month. The key date? September 12. That’s when Moderna announced that its Cytomegalovirus and Chikungunya programs were showing positive results.

Moderna’s research focuses on protein generation through “messenger molecules” that can potentially cure or prevent deadly diseases, including cancer. The CMV vaccine is an especially important part of the company’s research, as there’s currently no vaccine or cure. CMV threatens the lives of newborn children. Moderna’s management expects to progress even faster through Phase 2 trials and is planning to test the vaccine’s efficacy in preventing the disease to spread from mother to fetus.

Transferred via mosquito bites, Chikungunya is another dangerous disease in Moderna’s crosshairs. The company’s Chikungunya vaccine has proven successful at producing needed antibodies. Analysts believe the company’s research could translate well into other disease-prevention programs.

These are just some of the reasons analysts are bullish on Moderna. Wall Street has rated it a “Strong Buy,” and analysts say the stock could soar by 55% in the next 12 months, reaching a share price of $28 to $40.

Cytokinetics Inc.

Cardiovascular and neuromuscular diseases are the focus at Cytokinetics. The company’s stock price has risen 106% this year, with a 5% surge last week after the company reported the results of CK-274 drug trials.

Cytokinetics is researching ways to improve muscle function among patients with chronic diseases. Phase 2 trials have focused on hypertrophic cardiomyopathy, a disease that obstructs blood flow. Even though it’s in its infancy, CK-274 is already proving to be more effective than existing drugs.

Analysts predict further price gains and have issued a “Strong Buy” consensus. They say the price could rise to $16 to $26 in the coming year.

Atara Biotherapeutics

Analysts say Atara is a stock to watch even though the price has declined steadily this year. The skit stopped when Atara presented a report on Ata188 at the Congress of the European Committee for Treatment and Research in Multiple Sclerosis. At that point exactly, Atara’s stocks surged by 4%. Analysts say they will rise even further.

Like Moderna, Atara seeks a cure for cancer. The company’s approach involves T-cell immunotherapy. Ata188 targets cancerous cells in the patient's system, thus preventing development of multiple sclerosis. Specifically, it’s designed to fight Epstein-Barr virus. Early results show that drug is effective and safe, a potential lifesaver for millions of people.

Analysts agree that Atara deserves a “Strong Buy” rating. Projections forecast a share price as high as $70 a year from now.

Biotech is expensive and risky, but when a company makes a breakthrough, investors reap huge rewards. With so many companies delivering good results in early trials, now may be the perfect time to jump into the market.

About author

I have always thought of myself as a writer, but I began my career as a data operator with a large fintech firm. This position proved invaluable for learning how banks and other financial institutions operate. Daily correspondence with banking experts gave me insight into the systems and policies that power the economy. When I got the chance to translate my experience into words, I gladly joined the smart, enthusiastic Fortunly team.

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