Oppenheimer Is Excited About These 3 Biotech Stocks

Oppenheimer initiated coverage on three biotech companies Monday, all of which the firm initiated at Outperform. The three stocks are Compugen Ltd. (USA) CGEN, La Jolla Pharmaceutical Company LJPC and Geron Corporation GERN. Of these, Oppenheimer said that La Jolla Pharmaceutical is the most undervalued, placing a 12- to 18-month price target of $43 on the $19 stock, a 126 percent return.

Here are the highlights:

• La Jolla Pharmaceutical ($43 price target): LJPC has an "attractive pipeline addressing multiple, large unmet medical needs," Oppenheimer noted. The company has a Phase III trial for catecholamine-resistant hypotension, which Oppenheimer said has a "good chance" of success. Also driving value: the company owns the rights to early-stage pipeline products "which are getting close to entering clinical trials."
• Compugen ($11 price target): Oppenheimer said that Compugen is a "unique platform biotech player in the cancer immunology field with a broad early-stage platform." Notably, the company has a "predictive drug discovery platform" that will help it discover more drug targets "in a rapid and cost-efficient manner." On the risks front, Oppenheimer said that Compugen might take longer to realize the benefits of its drug discovery.
• Geron ($5.50 price target): Oppenheimer brushed off concerns that Geron Corporation only has one product candidate – imetelstat – noting that it has the "resources to acquire additional assets to broaden its pipeline." In addition, that candidate has a "paradigm-changing potential." Also important, the company's collaboration with Janssen in 2015, which Oppenheimer expects to "drive the share price."