These three Penny Shares Have Huge Upside Potential, Says Cowen
It’s a combined bag in terms of opinions on penny shares. These tickers buying and selling for lower than $5 per share divide Wall Avenue like no different; market watchers both love them or hate them.It’s straightforward to know the attraction. Firstly, you get extra bang to your buck. On high of this, with shares altering fingers for cut price costs, even what looks as if miniscule share value appreciation can translate to monstruous share good points. For some, nonetheless, the danger poses too nice a risk to disregard. While you look beneath the hood of those low-priced names, you would possibly discover very actual issues like poor fundamentals or looming headwinds.So, how are buyers supposed to identify the penny shares poised to go from rags to riches? By turning to the professionals.With this in thoughts, we wished to take a more in-depth have a look at three penny shares getting love from the professionals, specifically the analysts at funding agency Cowen. In keeping with the agency, all three may soar within the yr forward. Utilizing TipRanks’ database, we discovered why Cowen analysts are pounding the desk regardless of the danger concerned.Neos Therapeutics (NEOS)Creating and commercializing revolutionary merchandise, Neos Therapeutics desires to make a major distinction within the lives of sufferers with Consideration Deficit Hyperactivity Dysfunction (ADHD) and different central nervous system (CNS) situations. Though this identify has struggled previously, Cowen thinks that at $zero.47 apiece, now’s the time to snap up shares.Writing for the agency, analyst Ken Cacciatore acknowledges the momentum that was being pushed by Adzenys XR-ODT, the corporate’s amphetamine-based remedy for ADHD, and Cotempla, its methylphenidate-based CNS stimulant additionally designed for ADHD, has slowed because of the pandemic. Nonetheless, primarily based on current prescription developments, the analyst is seeing “indicators of restoration forward of the again to highschool (by way of video/classroom) acceleration in This fall.”Expounding on this, Cacciatore said, “We proceed to consider that administration is taking the rights steps with the strategic enhancements which appear to be benefiting from the extra focused prescriber base focus and extra fast adoption of the newco-pay help/achievement program (Rx Join), to enhance the profitability per prescription. And given what seems to be its early success of Rx Join alongside spending discount plan and salesforce restructuring we consider Neos may attain profitability by early 2022.”As the online income per pack for Adzenys and Cotempla grew 6% year-over-year to succeed in $128, Cacciatore argues the corporate’s efforts are paying off. “Once more, we consider these information factors seem to mirror the improved industrial strategy, and the effectiveness of the corporate’s Neos Rx Join pharmacy program which simplifies the beforehand extra complicated prescription achievement and co-pay help,” he commented.By enabling this entry with Rx Join, physicians can write prescriptions for Cotempla and Adzenys with out worrying about affected person call-backs. In keeping with administration, 30% of prescriptions are at the moment fulfilled by this program, and after a number of massive regional pharmacy chains have been added, the overall variety of partnered pharmacies was nearly 900 in June, in comparison with 800 on the finish of Q1.What’s extra, the truth that NEOS is the one firm to have each a methylphenidate and amphetamine alternate dose formulation product for the remedy of ADHD is sufficient to make it a stand-out, in Cacciatore’s opinion. Calling Cotempla the “good complement to Adzenys,” he notes that every asset covers one half of the massive stimulant market.The analyst added, “Adzenys XR-ODT has skilled spectacular prescription development over the course of the previous yr, and is now the popular ADHD various dosage kind taking on from Pfizer’s market-leading Quillivant XR as its new-to-brand market share reached the #1 place.”Additionally promising, NEOS gives Adzenys ER, which is an extended-release liquid suspension stimulant product for ADHD. The product is amphetamine-based like Adzenys XR-ODT, however is an alternate dosage kind for sufferers who don’t favor tablets or capsules. Cacciatore factors out that success with the liquid various dosage kind has already been demonstrated as Pfizer’s Quillivant XR generated over $100 million in annual gross sales in 2017.To this finish, Cacciatore charges NEOS an Outperform (i.e. Purchase) together with an $eight value goal. Ought to the goal be met, a twelve-month achieve within the form of a whopping 1,604% might be in retailer. (To observe Cacciatore’s monitor report, click on right here)Turning now to the remainder of the Avenue, three Buys and no Holds or Sells have been revealed within the final three months. Subsequently, NEOS has a Robust Purchase consensus ranking. At $eight.33, the typical value goal is much more aggressive than Cacciatore’s and implies 1674% upside potential. (See NEOS inventory evaluation on TipRanks)Dynavax Applied sciences (DVAX)Bringing intensive experience in Toll-like Receptor (TLR) biology and cutting-edge adjuvant expertise to the desk, Dynavax develops vaccines to guard the inhabitants. Due to its promising pipeline and $four.30 share value, Cowen believes buyers ought to get in on the motion.Representing the agency, 5-star analyst Phil Nadeau cites Heplisav as a key part of his bullish thesis. The product is an HBV vaccine that has been proven to be more practical than the opposite at the moment marketed HBV vaccines in a variety of Section three trials. Based mostly on commentary from the agency’s consultants, he argues the asset may seize a good portion of the $500 million-plus worldwide marketplace for grownup HBV vaccines.Additionally contributing to Nadeau’s optimistic stance, DVAX has agreed to a number of partnerships to additional discover if CpG 1018, the adjuvant in Heplisav, can enhance the efficacy of different vaccines.In September, DVAX introduced its provide settlement with Valneva to provide as much as 190 million doses over 5 years of Valneva’s COVID-19 vaccine candidate, VLA2001. This vaccine is an inactivated entire virus vaccine towards the SARS-CoV-2 virus, and can incorporate DVAX’s CpG 1018 adjuvant. Medical trials are anticipated to kick off by YE, with approval probably coming in 2H21. As well as, the UK authorities has secured a provide of 60 million doses for €470 million, and there’s an choice for one more 130 million doses for about €900 million.DVAX has already conveyed that it desires to make CpG 1018 a broadly used adjuvant, and has been making “fast progress in implementing it,” says Nadeau. He notes that this deal is in step with this technique, and “in some methods represents a subsequent step.” He added, “The availability settlement is notable because it helps reveal the economics that profitable improvement of partnered vaccines may convey.”In keeping with the corporate’s steerage, CpG 1018 may seize 15-30% of the economics when utilized in partnered vaccines. “Although administration has not disclosed the precise economics within the Valneva collaboration, we consider they’re in step with DVAX’s steerage and suspect they’re towards the center of the vary,” Nadeau commented.“In our opinion DVAX is considerably undervalued for the potential of Heplisav and the CpG 1018 adjuvant,” Nadeau concluded.It ought to come as no shock, then, that Nadeau sides with the bulls. Together with an Outperform (i.e. Purchase) ranking, he places a $20 value goal on the inventory, indicating 370% upside potential. (To observe Nadeau’s monitor report, click on right here)Different analysts echo Nadeau’s sentiment. three Buys and no Holds or Sells add as much as a Robust Purchase consensus ranking. With a median value goal of $16, the upside potential is available in at 276%. (See DVAX inventory evaluation on TipRanks)La Jolla Pharmaceutical (LJPC)Final however not least we now have La Jolla Pharmaceutical, which develops revolutionary therapies for life-threatening ailments with important unmet want. Given its spectacular expertise, Cowen sees its $four share value as presenting a beautiful entry level.Analyst Phil Nadeau, who additionally covers DVAX for the agency, highlights LJPC’s first industrial product, Giapreza, a patented formulation of the naturally occurring hormone peptide, angiotensin II, as some extent of power. Angiotensin II is a potent vasoconstrictor and a key regulator of blood stress.The launch has been rocky, with the pandemic hitting the acute care in-hospital section arduous. That stated, Nadeau stays optimistic. “…our consultants assume there’s a want for brand new vasopressors in CRH, and subsequently we stay hopeful that Giapreza can ramp to change into a significant product over time,” he defined.On high of this, in July, LJPC acquired Tetraphase, giving it the rights to Xerava, a novel fluorocycline antibacterial designed for the remedy of sophisticated intra-abdominal infections. Although the remedy’s utilization was almost definitely impacted by COVID-19, Nadeau has excessive hopes for the product.Nadeau argues LJPC will be capable of leverage its present infrastructure to market and promote Xerava, with solely minimal further spend anticipated.“Although Xerava has many opponents, the marketplace for antibiotics used to deal with intra-abdominal infections is massive — sufferers with appendicitis alone contribute to over 1 million hospital days annually within the U.S. Thus, with promotion, Xerava ought to proceed to develop,” the analyst stated. To this finish, Nadeau tasks $15 million in Xerava income in 2021, with this determine ramping to $60 million in 2024.Summing all of it up, Nadeau said, “Buying and selling with a modest enterprise worth, La Jolla is undervalued ought to Giapreza and Xerava be efficiently commercialized.”Taking the above into consideration, Nadeau charges LJPC an Outperform (i.e. Purchase) ranking together with a $20 value goal. This goal conveys his confidence in LJPC’s capacity to climb 402% larger within the subsequent yr.What does the remainder of the Avenue must say? In terms of different analyst exercise, it has been comparatively quiet. 2 Buys and no Holds or Sells have been issued within the final three months. Subsequently, LJPC will get a Average Purchase consensus ranking. Based mostly on the $14 common value goal, shares may skyrocket 251% within the subsequent yr. (See LJPC inventory evaluation on TipRanks)To search out good concepts for penny shares buying and selling at enticing valuations, go to TipRanks’ Greatest Shares to Purchase, a newly launched software that unites all of TipRanks’ fairness insights.Disclaimer: The opinions expressed on this article are solely these of the featured analysts. The content material is meant for use for informational functions solely. It is vitally necessary to do your personal evaluation earlier than making any funding.