Three Oversold BioTech Names For Tired Gamblers

Investing in the biotech sector this past year has been akin to playing all-in blackjack with the FDA as dealer. The right card from the drug-approval administration and the chip stack could double or triple for a small cap biotech firm. But, one disappointing Phase II study or Phase III study, and investors all went bust.

After this month’s major sell-off, investors now say they are tired of gambling on small cap biotech. Biotech ETF, $IBB, is down 13% in the past thirty days. That has cashtaggers on StockTwits.com looking to play with the weakened big boys: companies with market caps of over $2 billion, approved, revenue producing drugs, and, ideally, a pipeline of products.

$PCYC this month's biotech sell off accelerated the inevitable gap fill possibility for many stocks BIIB PCYC CELG

— Sudip Banerjee (@banerjeesudip) Mar. 29 at 09:12 PM

The potential payouts might not be as big. But the risk of losing everything is much lower. Here are three tickers that have StockTwits’ users talking.

#1. Pharmacyclics, $PCYC.
The top trending ticker on StockTwits.com at the open Monday, Pharmacyclics has $7.53 billion market cap and an approved cancer drug. Its IMBRUVICA medication is used to treat leukemia patients and also people suffering from a rare blood cancer known as mantle cell lymphoma. The drug inhibits enzymes needed by tumors to spread and is being tested for efficacy against other types of cancers.

Last year, Pharmacyclics posted a $117 million profit, excluding some items, on $260.2 million in sales. It trades at nearly 29X trailing twelve-month sales. Cashtaggers say that’s impressive, given the number of biotech firms worth billions on the possibility that their drug will be approved and someday see real sales. Sentiment on the stock is 88% Bullish, according to StockTwits’ analytics.

Analysts have a generally favorable opinion of the company. The stock has eight buy recommendations, four holds, and zero sell ratings, according to the Analyst Ratings Network. Morgan Stanley initiated coverage last week Wednesday with an Equal Weight rating and a $120 price target. The stock currently trades at $100. The consensus price target is $156.25, according to ARN.

$GILD back over 70, $ISIS +7% on news, carrying over to $ALNY. $MDVN moving. $REGN simple of 300. $PCYC finding footing. All good buys dip

— So Generous (@sogenerous) Mar. 31 at 10:09 AM

#2. Biogen, $BIIB
Cashtaggers buzzed Monday about this biotech winning FDA-approval for a hemophilia B treatment. The company announced Friday that the FDA gave the go-ahead for its DNA-derived treatment to control bleeding episodes in patients who have trouble clotting.

The company, which has a $72.18 billion market cap, has many approved drugs including treatments for multiple sclerosis, leukemia, and non-Hodgkin’s lymphoma. Last year, the company earned $2.1 billion, excluding some items, on $6.9 Billion in sales.

Analysts have 20 Buy ratings and 8 holds on the stock, according to the Analyst Ratings Network. Consensus calls for a $317 price target. It currently trades at $305.12. Sentiment on the stock is 75% Bullish, according to StockTwits’ analytics.

One of the few good stocks to trade for today: $BIIB

— Selwyn Duijvestijn (@Marktgevoel) Mar. 31 at 09:51 AM

#3. Gilead Sciences, $GILD
This biotech giant with a $108 billion market cap is down nearly 16% in the past month. And that, say cashtaggers, is a buying opportunity. The stock rose 2% this morning.

$GILD $CELG $BIIB $REGN $IBB all showing strength in the pre-market, on high vol too

— Brandon (@brduke) Mar. 31 at 09:13 AM

Gilead is most often in the news regarding its Hepatitis C drug Sovaldi, which was approved in December last year. The drug costs $1,000-a-day, which has raised the ire of some in congress, but it can cure patients of the disease. Untreated, Hepatitis C can result in liver failure.

Sovaldi isn’t Gilead’s only blockbuster drug. It also makes treatments for HIV/AIDS, Cystic Fibrosis, the flu, macular degeneration, hypertension and cardiovascular disease. That’s one reason why the company brought in $3.45 billion, excluding some items, on $11.2 billion in revenues last year.

Analysts have 24 buy ratings on the stock and 2 holds, according to the Analyst Ratings Network. Consensus price target is $88.92. The stock currently trades at $70.19. Sentiment on the name is 83% Bullish, according to StockTwits’ analytics.

$GILD @searchlight Calls working this morning. Good job. Conviction pays.

— Swingman24 (@Swingman24) Mar. 31 at 10:11 AM


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