In the back drop of the biotech S&P ETF impacted by the S&P shedding market valuation by close to 7 % this week, Robyn Karnauskas who heads Deutsche Bank’s biotechnology vertical as its director spoke to CNBC and provided tips to investors on the likely biotech performers in the small cap and big cap categories in the immediate future.
Under the large cap category, Karnauskas mentioned the Cambridge headquartered Biogen Idec Inc (NASDAQ:BIIB) as a likely outperformer. She summarized that the impending launch of its much awaited haemophilia drug will drive up valuations in this drug maker’s stock. She went on to estimate that the price target on the stock of this $75 billion market capped firm would jump up in the $30 to $100 region per share, from its current valuations over the next two quarters, primarily driven by the underlying lower valuation of the stock.
Therefore, Karnauskas recommended the stock to investors by explaining that she foresaw “only upside on this stock.” and no downside in the numbers. She further went on to underscore that the valuation jump “expectations are very low. Since the proof of concept for the biology here”
Under the small cap category, Karnauskas picked TESARO Inc (NASDAQ:TSRO), with a market cap of $1.14 billion. She listed out three key reasons as to why she thinks investors should buy into the stock at these levels.
The first point of attraction in the stock of TESARO Inc (NASDAQ:TSRO) for Karnauskas was the fact that the company is expected to release a drug by the beginning of next year, on the back of strong clinical trial data.
The second point of import that Karnauskas pointed out was the fact that the company has a second drug candidate for ovarian cancer, which is also looking very promising and expects this to be launched next year.
She went on to predict that this drug has the potential to earn the company in the region of $200 million to $3 billion. She further highlighted the fact that TESARO Inc (NASDAQ:TSRO) has a exceptional management team, which has prior experience in growing drug firms and selling them at huge marked up pricing. She also pointed that TESARO has a big chance to be a takeover target in the future.