Measuring Pre-Earnings Upside in Biotechs (DNDN, HGSI, GILD, AMLN, ARIA, INCY, IBB, XBI, BBH)
We have compiled a detailed list of expected upside in the biotech sector. The sector has consolidated and now there is about to be a rush of earnings reports from tomorrow’s emerging drug companies. Many are hoping for the return of upside in shares of Dendreon Corporation (NASDAQ: DNDN) and in Human Genome Sciences, Inc. (NASDAQ: HGSI). Unfortunately, those have turned into high-speed flameouts due to company-specific news events.
It appears as though Wall Street favors Gilead Sciences, Inc. (NASDAQ: GILD) in the large cap biotech stocks over its peers with more than 18% implied upside. Other smaller mid-cap biotechs with a high degree of expected upside were Amylin Pharmaceuticals, Inc. (NASDAQ: AMLN) of 32%, ARIAD Pharmaceuticals, Inc. (NASDAQ: ARIA) of 50%, and Incyte Corporation (NASDAQ: INCY) of over 60%.
Here is the full report on expected upside on these and more than a dozen other large-cap and mid-cap biotech stocks.
Human Genome Sciences, Inc. (NASDAQ: HGSI) is up again, a day after buyout rumors have circulated for nearly a 100% premium. We would caution that analysts still have close to the same price target on their own as the reported buyout price target.
Dendreon Corporation (NASDAQ: DNDN) is also still trying to get past its implosion after disappointing Provenge sales. It has even gone as far as cutting its headcount. Analysts still see big upside of well above 40% but the entire analyst bias is now very cautious.
Incyte Corporation (NASDAQ: INCY) had a very rough July to August period and that analyst upside may be phantom upside that has not yet adjusted for the price drops of the recent past. We have an early December decision date from the FDA for its myelofibrosis treatment.
As far as how these all compares to the key ETFs, the following should be considered:
iShares Nasdaq Biotechnology (NASDAQ: IBB) up 0.5% at $96.50 and the 52-week range is $83.96 to $110.02. Total assets under management are approximately $1.26 billion.
SPDR S&P Biotech (NYSE: XBI) up 0.5% at $63.79 and the 52-week range is $54.71 to $75.86. Total assets under management are approximately $500 million.
Biotech HOLDRs (NYSE: BBH) are up 0.2% on extremely thin volume and the 52-week range is $88.01 to $114.92. Total assets under management are approximately $240 million.
JON C. OGG