Stifel began coverage on 10 rare disease-focused companies, with seven “buy” and three “hold” ratings, noting that with an estimated 7,000-plus rare diseases – 95% of which lack approved therapy – these are early days for orphan drug development.
“Longer term, we believe orphan drugs can support sustainable business models that offer attractive investment opportunities,” writes analyst Dae Gon Ha, Ph.D.
Rare diseases, which have patient populations of less than 200,000 people, according to the FDA, and less than one-in-2,000 people, according to the European Medicines Agency, affect some 350 million people worldwide.
Dr. Ha’s “buy” list, along with a price target, and recent closing price includes:
- Applied Genetic Technologies (NASDAQ:AGTC), $14, $5.08;
- Chemocentryx (NASDAQ:CCXI), $93, $67.84;
- Freeline Therapeutics (NASDAQ:FRLN), $21, $14.91;
- Fulcrum Therapeutics (NASDAQ:FULC), $18, $12.61;
- Orchard Therapeutics (NASDAQ:ORTX), $12, $6.97;
- Rocket Pharmaceuticals (NASDAQ:RCKT) $64, $55.58;
- Ultragenyx Pharmaceutical (NASDAQ:RARE), $179, $141.54.
His “hold” list, along with a price target and recent closing price includes;
- Amicus Therapeutics (NASDAQ:FOLD), $13, $12.28;
- Avrobio (NASDAQ:AVRO), $14, $11;
- Homology Medicines (NASDAQ:FIXX), $14, $10.74.
“For drug developers, small addressable patient populations and poorly understood disease pathology pose as challenging barriers to rare disease drug development,” Dr. Ha said. “However, we believe initiatives, patient advocates, and advances in science and technology are among several reasons drawing pharma/biotech industry’s attention.”
Dr. Ha said that through the COVID-19 pandemic, “we think there seems to be a shift in the public’s willingness to trust the R&D process of the pharma/biotech industry and the novel therapies that emerge from it, even if the underlying technology breaks new ground with less characterized profiles.”
