Are you looking for a biotech stock with growth potential? Verve Therapeutics (VERV) could be of interest to you. The stock appears expensive, as it has crushed the benchmark index so far this year, growing over 120%. Thus, I am bullish on the stock, but only if the price were lower.
Headquartered in Cambridge, Massachusetts, Verve Therapeutics is a biotech developer of innovative treatments for cardiovascular disease patients.
The company's lead treatment candidate is called VERVE-101. It is a single gene-editing treatment that blocks the PCSK9 gene in the liver. The medication lowers the concentration of bad cholesterol, and so too the risk of cardiovascular disease and a heart attack. (See VERV stock charts on TipRanks)
From Q2 2021
In the second quarter of 2021, the net loss reached $53 million, or $6.66 per common share. This was worse than the year before, due to increased spending on research & development as well as higher general & administrative expenses.
The initial public offering of about 16.1 million newly issued common shares enabled the company to raise funds, now in cash on hand, and short-term securities, up to $418 million. This should be enough for the development of the pipeline.
Treatment Perspectives
In its early stages, VERVE-101 will treat adult patients with familial hypercholesterolemia, which is a life-threatening genetic atherosclerotic cardiovascular disease. Later, the medicine will treat patients with various cardiovascular diseases.
There were 523 million cardiovascular disease patients in 2019, according to statistics published by the American College of Cardiology in December 2020. The number went up more than twice over the prior three decades.
Unlike other similar treatments, VERVE-101 aims at a prolonged effect throughout the years with just a single treatment. VERVE-101 also points to more tolerable side effects than conventional treatments such as statins.
These gene-editing treatments are expensive, but they could be used at the expense of the healthcare system, if included in a wider therapeutic program. The drug could be part of a program that addresses leading heart disease factors, such as tobacco and alcohol consumption, overweight or obesity, sedentary behaviors, stress, diabetes, and others.
Thus, this stock holds amazing growth potential. Any progress in the VERVE-101 pipeline may serve as a catalyst to the share price.
Wall Street’s Take
In the last 3 months, four Wall Street analysts issued 12-month price targets for Verve Therapeutics. The average Verve Therapeutics price target is $68.67 apiece, versus the August 27 closing price of $70.33. The price target implies a downside of 2.36%. The analyst rating consensus is a Strong Buy, based on 3 Buy and 1 Hold ratings.
Summary
This stock has great potential, as its medication is an innovative treatment for a widespread medical condition globally, which is the most common cause of death.
Verve Therapeutics’ lead product candidate aims at tolerable side effects and long-lasting benefits with just a single treatment course.
Since the stock is not cheap, investors might want to buy shares when the price hovers back the 50-Day Moving Average value of $59.27 apiece.
Disclosure: At the time of publication, Alberto Abaterusso did not have a position in any of the securities mentioned in this article.
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