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) (NASDAQ: CGEN), La Jolla Pharmaceutical Company (NASDAQ: LJPC) and Geron Corporation (NASDAQ: 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."