Trading volume spikes in beaten-down stocks often signal a bottom for prices investors can bank on. The problem is that beaten-down stocks are usually in that position for a good reason, so it helps if there is a catalyst for higher share prices in addition to the trading volume. The three biopharmaceutical stocks on this list have catalysts for higher share prices ranging from insider buying to product launches, their growth outlook, and analysts’ sentiment. The question is whether they are worth buying today or if lower prices will come before the big rebound.
Get Outlook Therapeutics alerts:Sign UpAclaris Therapeutics Insider Buying Spikes
ACRSAclaris Therapeutics$1.26 -0.01 (-0.79%) (As of 07/11/2024 ET)52-Week Range$0.59▼$11.12Price Target$22.25
Aclaris Therapeutics NASDAQ: ACRS is a clinical-stage biopharmaceutical (biopharma) company working on novel therapies for immune-inflammatory diseases. It has several candidates in trials but is far from approval. The catalyst for this stock is insider buying, even though it is suspect. The insider in question is Braden Michael Leonard, a major shareholder and independent investor. He made numerous purchases in Q2, and the trend continued in Q3. His holdings top 13.4 million shares, or about 18% of the float, and may increase as the summer progresses.
The Q1 earnings report had some good news. The company is progressing its work and advancing at least one candidate into the Phase 2-A trials to test for effectiveness. Unlike some clinical-stage pharma companies, this one has a side business that helps sustain its operations. The company operates a contract research facility that brings in about $2.5 million per quarter.
Analysts are optimistic about the business and outlook and rate it a Hold. The lowest price target tracked by MarketBeat is more than 600% upside for the stock. The risk is that no revisions have been issued for several quarters, and a price gap is impairing the technical outlook. The market may increase to $6, but that level is at the top of the price gap and is a likely price point for significant market resistance.
CRISPR Therapeutics Has a More Substantial Catalyst for Share Prices
CRSPCRISPR Therapeutics$56.81 +1.25 (+2.25%) (As of 07/11/2024 ET)52-Week Range$37.55▼$91.10Price Target$75.71
CRISPR Therapeutics NASDAQ: CRSP is focused on gene-editing treatments for major diseases. Its catalyst is the launch of Casgevy, the first FDA-approved treatment for sickle cell disease. The last report included an update on the launch, which is live at 25 centers globally. The first patients have been enrolled, and their treatments are being prepared. The launch will result in top-line growth this year and acceleration in F2025. Analysts expect revenue to grow more than 400% this year to next and may underestimate the potential.
Analysts are less bullish on this stock, but the rating has more conviction. MarketBeat tracks 18 CRSP analysts and nearly two dozen revisions this year. They’ve lowered their sentiment rating from Moderate Buy to Hold, but the price target is rising. The $75 consensus target assumes about 35% upside for the stock, and the revisions are leading to the range’s high end or another 50% or more upside.
Outlook Therapeutic Launches Product in the EU and UK
OTLKOutlook Therapeutics$8.38 +0.77 (+10.12%) (As of 07/11/2024 ET)52-Week Range$4.00▼$37.00Price Target$46.43
Outlook Therapeutics NASDAQ: OTLK received approval for its first-ever product, expected to launch in Q1 2025. The takeaway is that revenue will go from $0 to $10 million quickly, and the estimates may be cautious. The treatment is for wet AMD, which has a drug-market value of nearly $9 billion.Analysts are very bullish on this stock, and their sentiment is a reasonable level of conviction. MarketBeat.com tracks eight analysts covering this stock, with six revisions issued this year. They rate the stock as a Buy and see it advancing over 450% at the consensus. The consensus is down from last year, but even the low target is 160% upside.
The risk is that Outlook Therapeutics investors face dilution. The share count increased more than 10% on average over the past year, and more sales are expected. Although the company’s balance sheet is capitalized, losses were significant in FQ2. Accounting for warrant-related expenses, the cash burn is sufficient to wipe out reserves quickly, even with the expected revenue gain in 2025. Because warrants are still in play and adequate shares are available to sell, additional dilution is expected.
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