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Paratek Makes Barron's Top 9 Biotech Picks List

Original Source: Barron's Website

It’s the eve of a new year. So this seems like a great moment to look at the outlook for biotech stocks in 2016.

The sector has staged a big comeback following the summertime slaughter that ravaged the industry, with the iShares Nasdaq Biotechnology ETF (IBB) climbing 19% since late September. But at Leerink, the firm’s favorite biotech names are yanked from the universe of small- and mid-cap names, a list that includes Adaptimmune Therapeutics (ADAP), Dermira(DERM), FibroGen (FGEN), Incyte (INCY), Intra-Cellular Therapies (ITCI), Seres Therapeutics (MCRB), Neurocrine Biosciences (NBIX), Ophthotech (OPHT) and Paratek Pharmaceuticals (PRTK).

We believe key risks for large cap biotech in 2016 include continued headline risks about pricing through the election cycle; the dampening of large cap profitability by large late stage pipeline investments; and slower-than-expected product launches faced with earlier competition, while key opportunities include potential outsized returns due to controlling multiple pieces of combination therapy strategies; regulators and payers remaining accommodating to ultraorphans; and winners continuing to win. In the small and mid cap arena, we think macroeconomic considerations place a premium on cash runways. The anemia market seems poised for resurgent growth, and we expect the predictive power of open-label data in CNS to be tested. New indications and pivotal trial results are pending in adoptive T Cell therapy (CAR-T/TCR).

Also working in the biotech industry’s favor in 2016: The FDA. Leerink expects 2016 to be another year of “high productivity” at the regulatory agency. As of mid-December, the FDA had approved 41 new molecular entities since the start of 2015 compared to 41 in 2014 and 27 in 2013.

12/31/2015 12:00:00 AM

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