Love them or hate them, penny stocks are controversial. These tickers, which trade at less than $5 a share, have gained a reputation on Wall Street for their divisive nature, leaving investors struggling to find common ground on the issue.
The call is clear. For the same price as a share of a more well-known company, investors can buy hundreds of shares of a penny stock. Additionally, the fact that even minor stock price appreciation can translate into irresistible percentage gains is attractive to some investors.
It is also understandable that some investors are wary. Opponents are quick to point out that there could be a very real reason these stocks are changing hands for pocket money, with low stock prices often masking obstacles such as weak fundamentals or winds. disturbing opposites.
No matter which side you take, one thing is certain: due diligence is required before making any investment decision. This is where Wall Street experts come in. These pros bring their extensive experience and knowledge to the table.
With that in mind, we turned to investment firm Piper Sandler for inspiration. Company analyst Yasmeen Rahimi has identified two compelling penny stocks, noting that each offers huge upside potential and could climb to $25 or even higher. In fact, it’s not just Rahimi who hides behind these names. According to the TipRanks database, both stocks are ranked as Strong Buys by analyst consensus.
Immunic, Inc. (IMUX)
We’ll start with Immunic, a clinical-stage biopharmaceutical company at the forefront of developing orally-administered small-molecule immunotherapies for chronic inflammatory and autoimmune diseases. Immunic’s work focuses on orally administered drugs, which is an important consideration. Many new drug treatments for autoimmune diseases require intravenous administration, with all the discomfort and inconvenience this entails for the patient. Oral dose treatment avoids these difficulties.
The Company’s current pipeline includes several drug candidates, two in clinical and one in preclinical testing, targeting multiple sclerosis, ulcerative colitis and celiac disease. The company’s flagship program targets multiple sclerosis and is in phase 3 clinical trials.
Clinically, Immunic’s lead program is IMU-838, vidofludimus calcium, which is being tested as a treatment for relapsing and progressive multiple sclerosis and moderate to severe ulcerative colitis. The first of these leads, in relapsing MS, is the most advanced, in a Phase 3 clinical trial. Previous Phase 2 trials of this drug candidate have shown clinically significant therapeutic activity in the treatment of MS. In April this year, the company also announced positive phase 2b data for the use of IMU-838 in the treatment of ulcerative colitis.
The company’s second major pipeline program is IMU-856, which is being studied as a treatment for celiac disease. This drug candidate has exceeded company expectations, showing success in proof-of-concept trials and in early-stage clinical trials. The company is preparing a phase 2b trial of IMU-856 in patients with ongoing active celiac disease.
Based on the potential of the company’s drug candidates and its $1.44 share price, Piper Sandler analyst Yasmeen Rahimi thinks now is the time to take action.
“We continue to believe that IMUX is an undervalued stock as we head towards two key events on the horizon on two strong assets: 1) IMU-838 in ~225 PMS patients on track to read key MFL and GFAP biomarker data in 2H23, and 2) initiation of a Ph2b study in celiac disease with IMU-856 following the first positive Part C Ph1b results, where the next management steps will be to working diligently on the protocol and design to submit an IND filing to the United States as quickly as possible to begin regulatory discussions. Overall, we continue to be confident of the success of the entire IMUX pipeline,” said the analyst.
To that end, Rahimi rates IMUX overweight (i.e. buy) and his price target, set at $28, implies an impressive upside of 1,844% over the next 12 months. (To see Rahimi’s record, click here)
So, that’s Piper Sandler’s point of view, how does the rest of the street see the next 12 months unfolding for IMUX? Based on 3 buy and 1 hold ratings, analyst consensus rates the stock as a strong buy. The average price target of $13.25 indicates that stocks could skyrocket 820% over the next year. (See IMUX Inventory Forecast)
Altimmune, Inc. (ALT)
The next penny we’ll look at is Altimmune, a clinical-stage biopharmaceutical company focused on peptide therapeutics, a class of drugs with applications for liver disease and obesity-related conditions. Altimmune’s peptide research track creates new therapeutic agents, with great potential in the treatment of several serious health conditions.
The Company’s pipeline currently includes three leads, all in the clinic. Two of these leads are studying the lead drug candidate, pemvidutide. It is a dual GLP-1/glucagon receptor agonist that has been shown in clinical trials to treat obesity and non-alcoholic steatohepatitis, a type of fatty liver disease. The company’s third research stream involves HepTcell, an immunotherapeutic agent under development by Altimmune for the treatment of the life-threatening chronic viral disease, hepatitis B.
These three leads form a compelling picture for investors to consider. In March, the company announced positive data from the 24-week segment of the MOMENTUM Phase 2 trial of pemvidutide in the treatment of obesity, and is currently running a 48-week section of the same trial. First results from the 48-week MOMENTUM trial are expected in 4Q23.
Altimmune is also leading the Phase 2 trial of HepTcell, which it hopes can become a working cure for chronic hepatitis B. The results of this trial are expected to be published in 1Q24.
Finally, the company is in the process of initiating the Phase 2b trial of pemvidutide in the treatment of NASH. This trial will last 24 weeks, after which patients should see a reduction in NASH and fibrosis, followed by an additional 24 weeks of treatment. If patients have gastrointestinal intolerance, a dose reduction will be allowed. The company expects to have top-notch results by 1Q25.
Despite the rich pipeline of therapeutic candidates, Altimmune shares have fallen 71% in the past 12 months. According to Piper Sandler’s Yasmeen Rahimi, this represents an opportunity for the title to experience substantial growth.
“We believe this stock has been over punished by Street despite strong interim MOMENTUM pemvidutide data that showed competitive weight loss and some of the strongest liver fat loss as we saw in NAFLD data. . That said, we believe that Ph2b IMPACT in NASH with an expected mid-2023 onset is significantly reduced. Additionally, we believe a full 48-week MOMENTUM (n=320) will rejuvenate investor interest in the name. Additionally, we believe there is a compelling story for pemvidutide as ALT engages in potential partnership discussions for obesity and NASH,” the analyst said.
Looking ahead, Rahimi gives ALT an overweight (i.e. buy) rating, along with a price target of $25 which indicates potential for a strong upside of 646% by the end of the month. middle of next year.
Overall, this stock has earned a unanimous consensus Strong Buy rating from Wall Street, based on 4 recent positive reviews from analysts. The average price target, at $29, indicates a solid 765% 12-month upside from the current trading price of $3.35. (See ALT Stock Forecast)
To find great stock ideas trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a tool that brings together all of TipRanks’ stock information.
Disclaimer: The views expressed in this article are solely those of the analysts featured. The Content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.