The biotech industry is advancing rapidly with significant breakthroughs in research and technological improvements. The industry is expected to continue playing a major role in addressing the resurgent COVID-19 pandemic. 

Supportive government initiatives and robust funding are clearing a path to the industry’s continued growth. And, according to a new report by Grand View Research, Inc., the industry is expected to expand at a 15.83% CAGR over the next seven years.

Given the industry’s strong growth prospects, Wall Street analysts expect biotech stocks Tarsus Pharmaceuticals, Inc. (TARS - Get Rating) and Cidara Therapeutics, Inc. (CDTX - Get Rating) to more than double in price in the near term.

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Tarsus Pharmaceuticals, Inc. (TARS - Get Rating)

TARS is a clinical-stage biopharmaceutical company, based in Irvine, Calif., that focuses on developing and commercializing novel therapeutic candidates for ophthalmic maladies. Its lead product candidate is TP-03, a novel therapeutic, which is in Phase IIb/III for the treatment of blepharitis and meibomian gland disease.

On July 4, TARS announced new data from its Saturn-1 Phase 2b/3 pivotal trial and the Titan real-world collarette prevalence study. The new Saturn-1 data reinforced the strong potential clinical utility of TP-03 for the treatment of Demodex blepharitis, with a broad range of patients showing a substantial response. If approved, this drug should allow TARS to grow significantly in the near term.

TARS’ net income increased 295.2% year-over-year to $6.35 million in its fiscal second quarter, ended June 30. The company’s EPS increased 123.6% year-over-year to $0.29. For the six months ended June 30, its cash and cash equivalents balance rose 232.5% from its year-ago value to $176.74 million.

Analysts expect TARS’ EPS to grow 90.3% in the current quarter and 90.7% in the current year. Shares of TARS have gained 2.1% intraday to close yesterday’s trading session at $23.95.

All five Wall Street analysts that rated TARS rated it Buy. A $54.00 median price target indicates a potential 125.5% upside from its last closing price. The 12-month price targets range from a low of $45.00 to a high of $67.00.

TARS has an overall B rating, which equates to Buy in our proprietary POWR Ratings system. The POWR Ratings are calculated by considering 118 different factors, with each factor weighted to an optimal degree.

The stock has a grade of A for Sentiment, and a B for Value and Quality. Among the 509 stocks in the Biotech industry, TARS is ranked #17. To see additional TARS ratings for Growth, Stability, and Momentum, click here.

Cidara Therapeutics, Inc. (CDTX - Get Rating)

CDTX is a biotechnology company that focuses on discovering, developing, and commercializing novel long-acting anti-infectives to treat and prevent diseases. It is headquartered in San Diego, Calif.

On April 4, CDTX announced its exclusive worldwide license and collaboration agreement with Janssen Pharmaceuticals, Inc. to develop and commercialize CDTX’s Cloudbreak® antiviral conjugates (AVCs) for the prevention and treatment of seasonal and pandemic influenza. Given that a significant number of people suffer from seasonal flu and there are up to 650,000 influenza deaths worldwide each year, this development should be widely in demand when it hits the market.

CDTX’s total revenue increased 868.8% year-over-year to $32.86 million in its fiscal second quarter, ended June 30. Its income  from operations stood at $10.77 million, up 159.2% from the same period last year. Its net income grew 158.5% from its year-ago value to $10.71 million. The company’s EPS has increased 140% year-over-year to $0.18.

A $5.20 million consensus revenue estimate for its  fiscal third quarter (ending September 2021) indicates a 115.2% increase year-over-year. The Street expects the company’s EPS to rise 19.5% in the current quarter, versus the prior-year quarter. CDTX has gained 31.4% in price over the past month and 14.5% over the past five days.

A $6.00 consensus price target indicates a potential 194.1% upside from its last closing price of $2.04.

The company has an overall B rating, translating to Buy in our proprietary POWR Ratings system. In addition, CDTX has a grade of A for Sentiment, and a B for Growth, Value, and Quality. It is ranked #23 in the Biotech industry. Click here to view additional CDTX ratings for Momentum and Stability.

Click here to checkout our Healthcare Sector Report for 2021

TARS shares were trading at $25.18 per share on Friday afternoon, up $1.23 (+5.14%). Year-to-date, TARS has declined -39.08%, versus a 21.24% rise in the benchmark S&P 500 index during the same period.

About the Author: Subhasree Kar

Subhasree’s keen interest in financial instruments led her to pursue a career as an investment analyst. After earning a Master’s degree in Economics, she gained knowledge of equity research and portfolio management at Finlatics. More...

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