In this article, we present the 10 pharmaceutical stocks that are being downgraded by analysts. You can skip our analysis of the pharmaceutical industry and go directly to Analysts Are Downgrading These 5 Pharmaceutical Stocks.
The pharmaceutical industry always remains in focus as investors scramble to find innovative companies working on treatments of diseases. The COVID-19 pandemic further highlighted the importance of biotech and pharmaceutical industries. According to a report by Deloitte, since 2020, the proportion of late-stage pipelines focused on infectious disease assets has grown by 4%. However, the enthusiasm around biotech and pharma stocks seen immediately after the pandemic is slowing down. The SPDR S&P Biotech ETF was down close to 20% in the first quarter of 2022, as compared to a 5% decline for the S&P 500. Still, analysts believe that notable pharmaceutical and biotech stocks like Pfizer Inc. (NYSE:PFE), Bristol-Myers Squibb Co (NYSE:BMY) and AbbVie Inc (NYSE:ABBV) have long-term growth potential because of their strong pipelines and massive R&D budgets.
Photo by National Cancer Institute on Unsplash
In this article we will take a look at some pharmaceutical stocks that were recently downgraded by notable analyst firms.
10. Recursion Pharmaceuticals Inc. (NASDAQ:RXRX)
Number of Hedge Fund Holders: 14
Recursion Pharmaceuticals Inc. (NASDAQ:RXRX) is a Utah-based digital biology company that is known for its Recursion Operating System or Recursion OS. The company is working on drug discovery technologies using AI and machine learning. BofA analyst Michael Ryskin recently downgraded Recursion Pharmaceuticals Inc. (NASDAQ:RXRX) to Neutral from Buy with a $10 price target. The downgrade comes after the analyst attended a meeting organized by the American Association for Cancer Research and also analyzed Recursion’s fourth-quarter results posted last month. Recursion Pharmaceuticals Inc. (NASDAQ:RXRX) posted a GAAP EPS of -$0.38 for the period. Revenue in the quarter declined about 6% to come in at $2.53 million.
In March, Recursion Pharmaceuticals Inc. (NASDAQ:RXRX) started enrollment in the phase 2 trial of REC-994 to treat a neurovascular disorder.
9. Nektar Therapeutics (NASDAQ:NKTR)
Number of Hedge Fund Holders: 24
Nektar Therapeutics (NASDAQ:NKTR) is a California-based company that uses cytokine pathways and other mechanisms to selectively modulate the immune system for the treatment of several diseases including cancer, autoimmune disorders, and chronic inflammatory conditions.
Goldman Sachs analyst Chris Shibutani recently downgraded Nektar Therapeutics (NASDAQ:NKTR) to Sell from Neutral after the company said it has decided to terminate the bempeg development program as a result of the bempeg plus nivolumab combination failing to show in first-line renal cell carcinoma. The analyst maintained his price target of $3 for the stock.
Mizuho analyst Mara Goldstein also lowered Nektar Therapeutics (NASDAQ:NKTR)’s price target to $6 from $8.
Of the 924 funds tracked by Insider Monkey, 24 had stakes in the company at the end of the fourth quarter. Hedge funds prefer popular and well-established names like Pfizer Inc. (NYSE:PFE), Bristol-Myers Squibb Co (NYSE:BMY) and AbbVie Inc (NYSE:ABBV).
8. BioCryst Pharmaceuticals, Inc. (NASDAQ:BCRX)
Number of Hedge Fund Holders: 19
BioCryst Pharmaceuticals, Inc. (NASDAQ:BCRX) is a North Carolina-based late-stage biotech company that focuses on oral drugs for rare and serious diseases. BioCryst Pharmaceuticals, Inc. (NASDAQ:BCRX) is known for its antiviral drug peramivir that was approved by FDA in December 2014. After the pandemic, small antiviral drug companies were gaining a lot of popularity, along with major companies like Pfizer Inc. (NYSE:PFE), Bristol-Myers Squibb Co (NYSE:BMY) and AbbVie Inc (NYSE:ABBV).
BioCryst Pharmaceuticals, Inc. (NASDAQ:BCRX) is losing ground after the stock was downgraded by Barclays analyst Gena Wang. Wang downgraded the stock to Equal Weight from Overweight with a price target of $13, down from $22. The analyst cited “uncertainty” around Factor D inhibitor BCX9930 in paroxysmal nocturnal hemoglobinuria for his downgrade.
7. Antares Pharma, Inc. (NASDAQ:ATRS)
Number of Hedge Fund Holders: 12
Antares Pharma, Inc. (NASDAQ:ATRS) focuses on self-injection, pharmaceutical products, and technologies with an emphasis on rheumatology, urology, endocrinology, and neurology. Antares Pharma, Inc. (NASDAQ:ATRS) is losing ground after it was downgraded by several analyst firms. Truist analyst Gregory Fraser downgraded Antares Pharma, Inc. (NASDAQ:ATRS) to Hold from Buy with a price target of $5.60, down from $7.00. The downgrade came after California-based biotechnology company Halozyme announced its plans to acquire Antares Pharma, Inc. (NASDAQ:ATRS) for $5.60 per share.
Raymond James analyst Elliot Wilbur also downgraded Antares Pharma, Inc. (NASDAQ:ATRS) to Market Perform from Strong Buy after the deal announcement.
6. Bicycle Therapeutics plc (NASDAQ:BCYC)
Number of Hedge Fund Holders: 21
Bicycle Therapeutics plc (NASDAQ:BCYC) is focusing on the treatment of cancer through synthetic short peptides constrained to form two loops that stabilize their structural geometry. B. Riley analyst Kalpit Patel recently downgraded Bicycle Therapeutics plc (NASDAQ:BCYC) to Neutral from Buy with a price target of $33, down from $62. The analyst’s downgrade comes after he spoke to a physician-scientist focused on treating patients with genitourinary malignancies. The expert does not see a clear path to approval of BT8009 unless it shows “meaningful” activity in other indications.
Unlike Pfizer Inc. (NYSE:PFE), Bristol-Myers Squibb Co (NYSE:BMY) and AbbVie Inc (NYSE:ABBV), which have established pipelines, small and innovative stocks like Bicycle Therapeutics plc (NASDAQ:BCYC) are high-risk, high-reward investments for beginner investors.
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Disclosure: None. Analysts Are Downgrading These 10 Pharmaceutical Stocks is originally published at Insider Monkey.
