Finance

Goldman Sachs predicts gains of more than 120% for these two ‘Strong Buy’ stocks


Despite a brief dip this week, the market is still showing strong momentum this year, S&P 500 Index up 8%. However, the big question on investors’ minds is: Can this momentum continue?

David Kostin, chief U.S. equity strategist at Goldman Sachs, gave four scenarios for investors to consider: “(1) In ‘catch-up,’ the S&P 500 will end the year at 5,800 (up 12% from today), (2) In ‘catch-up,’ “Catching up”, the S&P 500 will fall to 4500 (-14%), (3) continued mega-cap exceptionalism will push the index to 6000 (+15%), (4) recession fears will push lowered the index to 4500 (-14%).”

Which scenario will happen remains to be seen. However, Goldman Sachs analyst Richard Law made two specific stock recommendations, estimating upside potential of more than 120%.Law’s bullish outlook is echoed by others in the market; according TipRanks database, both stocks earn a Strong Buy consensus rating from analysts. Let’s take a closer look.

aurema pharmaceuticals inc. (Olma)

The first Goldman Sachs pick we’re looking at is Olema Pharma, a clinical-stage medical research company focused on the discovery, development and commercialization of new treatments specifically for women’s cancers. Olema has a pipeline surrounding lead drug candidate OP-1250, also known as palazestrant, being studied in six separate research areas, five of which are in clinical trials.

The five clinical tracks involve testing OP-1250 as a monotherapy and in combination with several other anticancer drugs for the treatment of ER+/HER2 metastatic breast cancer. The most advanced track is to study the drug as a monotherapy. Fully under the direction of Olema; several other tracks involve partnership programs with larger pharmaceutical companies.

The company’s most advanced is a Phase 3 pivotal monotherapy trial of OP-1250. The study launches in the fourth quarter of 2023, with topline results expected in 2026.

Meanwhile, several milestones are expected to be achieved this year. In May, the company will announce interim results from a Phase 2 clinical trial of OP-1250 combined with ribociclib at the ESMO Breast Cancer Annual Meeting in Berlin. Next, during the third quarter, the company expects to initiate a Phase 1b/2 study of its lead candidate in combination with everolimus.Finally, Olema expects to submit an investigational new drug application for its drug candidate OP-3136 to the FDA by the end of this year

All in all, the biopharmaceutical company has a good mix of sectors, which caught the attention of Goldman Sachs’ Richard Law.

“OLMA’s late-stage Phase 2 single-agent data showed impressive efficacy even in the elusive ESR1-WT population. While the mESR1 data looked consistent with competitors, the ESR1-WT data was arguably class-leading. Best. Results from a Phase 2 study of EMERALD learning using Phase 3 OPERA-1 in 2-3L show that palazestrant could be approved in mESR1 and ESR1-WT, although we are less confident why it could be approved in ESR1 -WT, while other drugs were able to succeed in ESR1-WT. Our Buy rating is driven by Pala’s best-in-class potential in the large ER+/HER2- breast cancer market and the likelihood of OLMA securing a biopharmaceutical partnership agreement “(OLMA announced as a 2024 priority) will likely bring additional gains to the value of the stock,” Law said.

Law has a $24 buy rating on OLMA and a $24 price target, which implies a 128% upside for the stock in one year. (See Law’s track record, click here)

Overall, it’s clear that Wall Street agrees with the bullish sentiment, looking at the unanimous Strong Buy consensus rating; the stock has 7 recent positive recommendations. The stock is priced at $10.51, with an average price target of $25, suggesting one-year upside potential of ~138%. Olma Stock Forecast)

mineral analysis therapy (MLYS)

The second Goldman Sachs pick is Mineralys, another clinical-stage biopharmaceutical company. Mineralys focuses on addressing the consequences of elevated levels of aldosterone, a hormone that, if elevated, can lead to severe high blood pressure. Aldosterone is part of the natural control of potassium and salt levels in the blood; when these levels are out of whack, high blood pressure often results. About 25% of people with high blood pressure also have elevated aldosterone levels.

This points to a huge potential market for Mineralys. About 122 million Americans age 20 and older have high blood pressure, whether treated or not. The prevalence of uncontrolled hypertension and its impact on organs such as heart and kidney disease have a huge impact on the economy in the form of preventable health care spending and lost work time. Mineralys developed a new drug candidate, lorunrostat, to address this medical need and is well advanced to clinical trials.

The company recently initiated a pivotal Phase 3 trial of lorundrostat, known as the Launch-HTN study. This is the second ongoing pivotal trial of the drug in patients with uHTN or rHTN. The study, launching in the fourth quarter of 2023, looks at what happens when the drug is added to patients’ existing blood pressure treatment regimens.

Advance-HTN, the first of two pivotal trials, is also progressing rapidly. Mineralys is using this trial to examine the safety and efficacy of lorondrostat when used as add-on therapy, a “standardized background treatment regimen based on AHA guidelines” or three antihypertensive drugs.

Mineralys expects to release top-line data from the Advance-HTN trial in the fourth quarter of 2024 and launch-HTN in the second half of 2025.

Checking again with analyst Richard Law, we found that he is optimistic about the company based on its previous success in Phase 2 trials and the dollar potential of the addressable market for hypertension treatments.

“Although spironolactone becomes a SOC for drug-resistant HTN, there remains an unmet need due to its effects on gynecomastia and hyperkalemia. Lorundrostat No. 2 has shown a placebo-adjusted SBP reduction of approximately 10 mmHg . Obese patients showed greater reductions of approximately 17 mmHg We believe this level of efficacy is best in class and that MLYS’s targeted approach to obesity-related HTN in the 3/4L setting can still treat only 7-8M in the US Target patients. We model lorundrostat to achieve ~$2.8B WW non-risk-adjusted, or ~$1.1B risk-adjusted peak sales in 2040. Our Buy rating is driven by MLYS, the drug may Demonstrates best-in-class efficacy in the large obesity-related HTN market,” Law believes.

Law’s Buy rating on MLYS is based on a $30 price target, indicating one-year upside of 138%.

All told, 3 analysts have recently reviewed the stock, and all of them are positive, with a unanimous Strong Buy consensus rating. Mineralys stock is trading at $12.61, and its average price target is $32, which is more optimistic than Goldman Sachs’s view, indicating strong growth of 154% in the coming year. MLYS Stock Forecast)

To find great ideas for stocks trading at attractive valuations, visit TipRanks Best stocks to buya tool that unites all of TipRanks’ equity insights.

Disclaimer: This article only represents the views of analysts and is for reference only. Please do your own analysis before investing.



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