The Biotech industry has been in the limelight for quite some time. Companies directly or indirectly involved in COVID-19 related products such as vaccines and medicines are ramping up their production capacities as several countries are dealing with new variants of the virus.
Biotech companies with non-COVID drug pipelines, on the other hand, are focusing on tech integration and DNA synthesis in hopes of breakthrough development. The global biotech industry is expected to grow at a CAGR of 15.8% over the next seven years to reach $2.44 trillion by 2028.
Given this backdrop, Wall Street analysts expect the biotech stocks Sorrento Therapeutics, Inc. (SRNE) and Catabasis Pharmaceuticals, Inc. (CATB) to gain significantly in the upcoming months.
Sorrento Therapeutics, Inc. (SRNE)
SRNE is a clinical-stage and commercial biopharma company engaged in developing therapies for cancer, autoimmune, inflammatory, viral, and neurodegenerative diseases. The company operates through two segments: Sorrento Therapeutics and Scilex.
On June 24, SRNE received Emergency Use Approval and Import License from Mexico Authority COFEPRIS for its COVID-19 detection drug COVI-STIX™, which is to be launched this month. SRNE should benefit significantly from this launch.
SRNE’s total revenue increased 84.6% year-over-year to $14.26 million in the fiscal first quarter, which ended March 31. The company’s service revenue increased 192.4% from its year-ago value to $7.23 million. Its net income stood at $2.42 million, indicating a 103.5% improvement from the same period last year.
Analysts expect SRNE’s revenues to increase 237.5% year-over-year to $134.94 million in the current year. Moreover, revenue is expected to increase by 792.8% in the next year. The consensus EPS estimate of $1.71 for the next year indicates a 363.1% rise from the last year. Shares of SRNE have gained 42.4% over the past year, and 42.9% year-to-date.
Two Wall Street analysts that rated SRNE, rated it Buy. The median price target of $24.50 indicates a potential upside of 151.2% from its last closing price of $9.76. The price targets range from a low of $19.00 to a high of $30.00.
Catabasis Pharmaceuticals, Inc. (CATB)
Catabasis Pharmaceuticals, Inc., a clinical-stage biopharmaceutical company, is engaged in the discovery, development, and commercialization of therapeutics. The company’s lead candidate is the QLS-215, a potential best-in-class plasma kallikrein monoclonal antibody in preclinical development for the treatment of Hereditary Angioedema.
CATB’s cash and cash equivalents balance rose 3,708.6% from the prior-year quarter to $121.99 million in the fiscal first quarter ended March 31, 2021. R&D expenses declined 50.9% year-over-year to $2.6 million. Net cash provided by financing activities came in at $104.26 million, indicating a 306.9% rise year-over-year.
Analysts expect the company’s EPS to improve 43.4% year-over-year in the about-to-be-reported quarter ended June 2021. Moreover, the EPS is expected to improve 64.3% in the current quarter ending September 2021. Shares of CATB have gained 2% over the past month.
Of the three Wall Street analysts that rated CATB, two rated it Buy while one rated it Hold. The median price target of $5.50 indicates a potential upside of 164.4% from its last closing price of $2.08. The price targets range from a low of $5.00 to a high of $6.00.
SRNE shares were trading at $9.50 per share on Tuesday morning, down $0.26 (-2.66%). Year-to-date, SRNE has gained 39.19%, versus a 16.48% rise in the benchmark S&P 500 index during the same period.
About the Author: Subhasree Kar
Subhasree’s keen interest in financial instruments led her to pursue a career as an investment analyst. After earning a Master’s degree in Economics, she gained knowledge of equity research and portfolio management at Finlatics.
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