Biopharmaceutical companies Athira Pharma (ATHA) and BioXcel Therapeutics (BTAI) outperformed the gains in the biotech space on Thursday after Mizuho launched its coverage on small and mid-cap names focused on the central nervous system (CNS).
Despite being a high-risk area historically, CNS space could offer lucrative opportunities for stock pickers as unmet medical needs and commercial prospects remain, the analyst Graig Suvannavejh argues.
Suvannavejh issues Buy ratings for Alector (ALEC), Athira Pharma (ATHA), BioXcel Therapeutics (BTAI), Harmony Biosciences (HRMY), Intra-Cellular Therapies (NASDAQ:ITCI), and rates Cerevel Therapeutics (CERE) with a Neutral recommendation.
BioXcel (BTAI) “is on the cusp of” moving to a commercial-stage company, the analyst added with a $19 per share target. The biotech recently earned FDA approval for sublingual film Igalmi for agitation linked to schizophrenia or bipolar disorder in adults.
Despite its imminent launch, Suvannavejh highlights Igalmi’s prospects in Alzheimer’s disease agitation, which could offer a revenue opportunity as twice as that of recently approved indications.
“HRMY and ITCI represent de-risked, revenue-generating companies, featuring strong top-line growth prospects and meaningful revenue expansion opportunities,” the analyst added, with $19 and $75 per share targets on the stocks, respectively.
Given the size of the Alzheimer’s market, Alector (ALEC) and Athira (ATHA) could offer a high risk and high reward opportunity should their candidates succeed, Suvannavejh wrote, estimating $15 and $6 per share targets for the clinical-stage biopharma companies, respectively.
Cerevel (CERE) “is a high-quality company, with an exciting pipeline and rich catalyst calendar,” the analyst argued. However, he issued a $30 per share target for the biotech noting that at the current valuation, it appears to have priced in the prospects.
See this graph to compare how the above stocks have performed this year.
Read More: BTAI, ATHA stocks gain as Mizuho launches coverage on SMID cap neuro names (NASDAQ:ITCI)