In the battle against the coronavirus, who will be able to defeat this formidable foe? In the three months since the onset of this public health crisis, names from all over the world have stepped up, hoping their approach will ultimately yield success. Those at the front lines currently represent the U.S., Europe and China.
As the outbreak escalated into a pandemic, even the most intense rivals have been working together to find solutions. However, at the end of the day, the fight underscores a geopolitical competition, with the first nation to produce an effective weapon against the virus potentially gaining an advantage both economically and in making sure their citizens are the first to receive it.
Against this backdrop, we used TipRanks’ Stock Screener tool to find three healthcare names that are battling COVID-19. On top of receiving praise recently from at least one analyst, each boasts a healthy dose of upside potential. We’re talking about over 60% here. Let’s tackle the search results.
Genmark Diagnostics (GNMK)
Operating as a molecular diagnostics company, Genmark’s products, which include ePlex and XT-8, provide effective ways to identify various health conditions. With its technology now being used in the fight against COVID-19, analysts see substantial gains in store for GNMK.
On March 19, the company revealed that its ePlex SARS-CoV-2 (COVID-19) test had been granted Emergency Use Authorization (EUA) by the FDA. Its test runs on GNMK's ePlex system and is expected to come with a price tag of about $110 per test. With the test able to provide results in only 90 minutes and ePlex’s ability to perform 96 tests in 8 hours, it’s no wonder GNMK has captured Wall Street’s attention.
Needham’s Mike Matson points out that “labs are reportedly clamoring for additional COVID-19 testing capacity given limited access to centralized COVID-19 testing.” As a result, the analyst wrote, “... while GNMK management downplayed the potential magnitude of the COVID-19 test on the 4Q19 earnings call, our recent conversation with management suggests a tremendous level of interest and leads us to believe that the test could be a significant tailwind in 2020.”
It should also be noted that demand is coming from customers that not only already have ePlex systems, but also from those without, helping to fuel more ePlex system sales. Matson commented, “While management noted on the 4Q19 earnings call that newly placed ePlex systems can take several months to be implemented, the urgency of the pandemic has shortened this to a single weekend in some cases.” Not to mention the demand for its Respiratory Pathogen (RP) test is also on the rise.
Even though some investors have expressed concern about GNMK’s manufacturing capabilities, Matson argues that the additional ePlex sales could still drive revenue upside. Taking all of this into consideration, the analyst left his Buy recommendation and $11 price target as is. Should the target be met, a twelve-month gain of 105% could be in the cards. (To watch Matson’s track record, click here)
Turning now to the rest of the Street, the majority of other analysts agree with Matson. With 3 Buys and 1 Hold assigned in the last three months, the verdict is that GNMK is a Strong Buy. The $9.67 average price target brings the upside potential to 80%. (See Genmark price targets and analyst ratings on TipRanks)
Bellerophon (BLPH)
After its share price soared a whopping 431% on March 20, this healthcare name is on the Street’s radar. Bellerophon, which specializes in developing treatments for cardiopulmonary diseases, has been pegged by some analysts as being able to play a key role in combatting COVID-19.
Driving the company’s massive climb was its announcement that INOpulse, its patented delivery system for inhalable nitric oxide (iNO), received Emergency Expanded Access to treat COVID-19 patients. Not only is the system portable and easy to use, but it can also be connected to any oxygen source and features easily interchangeable cartridges.
Based on the study of iNO in SARS, which is genetically similar to COVID-19, the molecule could reduce the need for ventilation by improving arterial oxygenation. Additionally, iNO has also been found to decrease lung infiltrates on a chest radiography as well as block the virus’ replication and improve cell survival.
According to Maxim Group analyst Jason McCarthy, the implications of a reduction in ventilators needed are significant given the way that Italian hospitals have been overwhelmed. “Ventilators are for in-hospital use and as we know there is shortage already. INOpulse is small, portable and can be reused. Patients can be treated in ambulatory setting or in their homes potentially,” he explained.
With the technology also standing to help prevent the virus from progressing to a severe point, McCarthy views this development as being critical. “This represents not just a turning point for Bellerophon, with the first real-world usage of INOpulse, but also potentially COVID-19 as INOpulse is among the first FDA authorized therapies for the disease,” he stated.
To this end, McCarthy stayed with the bulls, reiterating a Buy rating and $30 price target. This conveys his confidence in BLPH’s ability to move 67% higher in the next year. (To watch McCarthy’s track record, click here)
What do other analysts have to say? As it turns out, it has been relatively quiet when it comes to the rest of the Street. There has only been one other recent review, but it was a Buy, and therefore, the consensus rating is a Moderate Buy. The other price target also matches McCarthy’s. (See Bellerophon price targets and analyst ratings on TipRanks)
Vaxart Inc. (VXRT)
Last on our list is Vaxart, whose unique approach involves using tablets instead of injections to deliver vaccines. After reaching an agreement with Emergent BioSolutions to develop and manufacture its COVID-19 vaccine candidate on March 18, one analyst believes its future is filled with plenty of growth.
As per the terms of the agreement, Emergent will use its molecule-to-market contract development and manufacturing (CDMO) services to develop and manufacture Vaxart’s experimental vaccine, which is based on VXRT’s VAAST technology platform.
This technology gives VXRT an edge in the race for a COVID-19 vaccine in that it uses adenovirus type 5 (Ad5), which allows an oral-delivered vaccine to target the small intestine specifically, where it can stimulate mucosal immunity. As a result, this could spur robust immune responses.
H.C. Wainwright analyst Vernon Bernardino points out data suggests that COVID-19 can be transmitted by the fecal-oral route. “We believe an oral delivery CoV vaccine would be highly differentiated and could see significant future utility in the control and prevention of COVID-19, particularly in cases of fecal-oral transmission,” he commented.
In addition, Bernardino thinks that a vaccine against COVID-19 will in fact be necessary. Even though the analyst currently doesn’t include contributions from the candidate’s future sales in his model, he argues that the joint development effort with Emergent is a major step in the right direction.
“We believe this is a potential commercial opportunity down the road for companies like Vaxart and Novavax (NVAX; Buy), which have already produced multiple recombinant nanoparticle-based vaccine candidates for preclinical evaluation...Thus, we believe Vaxart’s arrangement with Emergent, which is similar to the agreement Novavax entered into with Emergent on March 10, 2020, offers potential future scalability and rapid deployment capabilities,” he noted.
Based on all of the above, Bernardino kept a Buy rating and $3 price target on the stock. Given this target, shares could surge 67% in the next twelve months. (To watch Bernardino’s track record, click here)
Currently, Bernardino is the only analyst that has thrown an opinion into the mix recently. However, this could change should the public health crisis further intensify. (See Vaxart stock analysis on TipRanks)