Time in the market beats timing the market, as the old adage goes. This platitude plays particularly well regarding biotechnology stocks, as one will want to be invested in these stocks well before any big news comes out. Axcella Health Inc. (AXLA) is no exception, as the company is making strides on breakthrough therapies.

Analysts are bullish on the stock. One such analyst is Keay Nakae of Chardan Capital Markets, who assigned a Buy rating and a price target of $10. While this price target represents a significant decrease from Chardan’s previous level at $16, it nonetheless reflects a potential upside of 102.02% from the Friday closing share price.

Nakae explained that Axcella has several drugs and therapies in clinical trials, including one for treating nonalcoholic steatehepatitis (NASH), which he is confident will succeed in the current market despite its competitive nature. He expects the drug to "thrive as a base level therapy due to its impressive safety/ tolerability profile,” and anticipates FDA approval on it by 2026.

The analyst described a second treatment, one for overt hepatic encephalopathy (OHE), which he expects will receive FDA approval by 2025.

In the second half of FY21, Axcella plans to disclose its strategy about future advancements of clinical drugs, as well as to “reconnect” later this year with the FDA in regards to the pediatric NASH trials.

Nakae did list a number of risks threatening the company, namely complicated clinical trials due to COVID-19 restrictions, regulatory delays, supply chain disruptions, and increased competition.

On TipRanks, Axcella has an average rating consensus of Strong Buy, and an average analyst AXLA price target of $11.25. This reflects a potential 12-month upside of $127.27.

Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.

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