Credit Suisse Initiates On Smid-Cap Biotechs, Reveals Favorite Stock Picks

In a new report, Credit Suisse analyst Kennen MacKay discusses the firm’s top biotech stock picks. According to MacKay, it’s important for investors to remain selective at the biotech sector undergoes a market correction.

Credit Suisse focused on four themes when identifying top biotech picks:
1. Potential near-term positive clinical catalysts
2. Potential near-term product launches
3. Solid management teams
4. Solid biology supporting underlying technology

Overall, the firm sees the pullback in small and mid-cap biotech names over the past year as a buying opportunity, but headwinds also remain in 2016.

“We favor companies with novel/unique biotechnology supported by strong underlying biology supporting their drug target, mechanism, and targeted indication,” MacKay explained.

Credit Suisse’s top three Out Perform picks are Medivation Inc MDVN, Agios Pharmaceuticals Inc AGIO, and Ultragenyx Pharmaceutical Inc RARE.

In addition, the firm has a Neutral rating on FibroGen Inc FGEN and Akebia Therapeutics Inc AKBA and an Under Perform rating on OvaScience Inc OVAS.

Disclosure: the author holds no position in the stocks mentioned.