Here are 4 top biotech stock ideas from Jefferies

Published Mon, Aug 7 201711:49 AM EDT

Jefferies' research team shared its favorite biotech stock picks that it expects will benefit from upcoming news events. "Inside this report we have selected ... notable stock catalysts over the next 6 to 12 months within the Jefferies Biotech universe," wrote analyst Michael Yee in Sunday's note. The firm focuses on "near-term events into year-end where we think risk/reward is positive and would recommend owning." Jefferies said that the industry's ever-improving backdrop coupled with outperformance and positive data in the last few months should make these stocks appealing to investors. Here are four companies that made Jefferies' recommended list and their price targets. 1) Axovant Sciences ( AXON ) Axovant is a clinical-stage pharmaceutical company, which develops drugs to treat neurological diseases, including Alzheimer's. "[The firm has] late September Phase III Alzheimer's data with upside potential to $100. … Mixed scenario could be statistically significant, but only modest benefit such as 0.6 – 0.9. However, if statistically significant and it has minor benefit on the Alzheimer's Disease Assessment Scale (ADAS-cog) we think the stock could still go up 50%+ because it would likely still be approved by the FDA." Yee's 12-month price target on Axovant is $40, representing 71 percent upside from Friday's close. 2) DBV Technologies ( DBVT ) The French biopharmaceutical company produces and administers technology designed to resist food allergies and pediatric allergies for which there are no effective treatments. Currently, DBV has developed two products: Viaskin Peanut to treat peanut allergies and Viaskin Milk to treat cow's milk allergies. "Key Phase III data for Viaskin Peanut in peanut allergy is expected in 4Q17, which we expect to be positive on prior trial experience & conservative powering assumptions. If successful, we see approximately 25 to 50 percent upside in shares." Jefferies analyst Eun Yang's 12-month price target on DBV is $51, representing 12 percent upside from Friday's close. 3) Esperion Therapeutics ( ESPR ) Michigan-based Esperion is focused on the development of an oral drug designed to significantly lower "bad" LDL cholesterol without significant risk of muscle-related side effects. "[There is] August Phase II bempedoic acid 'triple pill' data comparing statin + Zetia + bempedoic acid (ESPR) combination versus placebo. We think triple combination should look good and show clean safety and could show significant LDL reductions greater than 50 to 60 percent, which would be a large LDL reduction benefit all in one pill." Yee's Esperion 12-month price target is $55, representing 18 percent upside from Friday's close. 4) AveXis ( AVXS ) The gene therapy company announced alignment with the FDA on the company's protocol for its gene therapy candidate. The candidate is a one-time treatment for SMA Type 1, a genetic muscular disease leading to reduced muscle movement. "AveXis plans to meet with the FDA in 4Q17 to discuss Phase One data and potential for accelerated approval. This could be a significant positive catalyst. We also could receive an update on discussions with the European Medicines Agency by the end of summer. Finally, we expect the company is on track to start the pivotal Type 1 SMA trial in late Q3 after completion of preclinical tests requested by the FDA." Jefferies analyst Biren Amin's 12-month price target on AveXis is $92, representing more than 4 percent downside from Friday's close. Disclaimer

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Jefferies' research team shared its favorite biotech stock picks that it expects will benefit from upcoming news events.

"Inside this report we have selected ... notable stock catalysts over the next 6 to 12 months within the Jefferies Biotech universe," wrote analyst Michael Yee in Sunday's note. The firm focuses on "near-term events into year-end where we think risk/reward is positive and would recommend owning."

Jefferies said that the industry's ever-improving backdrop coupled with outperformance and positive data in the last few months should make these stocks appealing to investors.

Here are four companies that made Jefferies' recommended list and their price targets.