Very good article . I copied and Pasted ....OPKO Health (OPK)
Through its unique products, comprehensive diagnostics laboratories and robust research and development pipeline, OPKO Health wants to improve the lives of patients. OPKO shares have surged 162% this year, but at $3.86 apiece, several analysts believe this stock is still undervalued.
Following the announcement that OPK had kicked off the Phase 2 REsCue study of Rayaldee for the treatment of mild-to-moderate COVID-19, 5-star analyst Edward Tenthoff, of Piper Sandler, points out that he has high hopes for the company. Rayaldee is currently approved for secondary hyperparathyroidism (SHPT) in stage 3-4 Chronic Kidney Disease (CKD), and is progressing through a Phase 2 study in dialysis patients.
According to Tenthoff, many of the patients in the COVID study will have stage 3-4 CKD, “where Rayaldee has demonstrated clinical benefit.” On top of this, the analyst thinks boosting serum 25D may augment macrophage immunity by secreting potent antiviral proteins targeting.
Reflecting another positive, service revenue of $251 million in Q2 2020 beat expectations as a result of the 2.2 million SARS-CoV-2 PCR and antibody tests performed at BioReference Labs in the quarter. Adding to the good news, OPK guided for 45,000-55,000 tests per day in Q3 2020 and service revenue of $325-350 million in the quarter. It should be noted that this includes the base diagnostic business, which is starting to bounce back. To this end, Tenthoff estimates service revenue could climb 53% higher to reach $1.1 billion this year.
Tenthoff is also looking forward to the somatrogon, the company’s treatment for pediatric growth hormone deficiency (GHD), regulatory filings. Its partner, Pfizer, plans to submit the BLA this fall, with U.S. approval and market launch potentially coming in 2H21. An open-label European study is expected to wrap up this quarter, and will enable an EMA filing in 2021. In addition, pivotal Phase 3 Japanese data in pediatric GHD patients could support a regulatory filing in the country in 1H21.
Based on the therapy’s Phase 3 trial, in which it met the primary endpoint with height velocity, Tenthoff sees approval as being likely.
In line with his optimistic approach, Tenthoff stays with the bulls. To this end, he keeps an Overweight (i.e Buy) rating and $10 price target on the stock. Investors could be pocketing a gain of 159%, should this target be met in the twelve months ahead. (To watch Tenthoff’s track record, click here)
All in all, other analysts echo Tenthoff’s sentiment. 4 Buys and no Holds or Sells add up to a Strong Buy consensus rating. With an average price target of $8, the upside potential comes in at 107%. (See OPKO stock analysis on TipRanks)
