Gray stock: My research starts from 800 shares of investment on March 15, 2021

March 15, 2021

Graybug Vision (GRAY)

Last on Needham’s value list is Graybug, a biopharmaceutical firm conducting clinical-stage research on medications to treat chronic diseases of the retina and optic nerve. The company focuses on long-term treatments, with drugs to be administered no more than twice per year – and provide relief from vision loss due to age-related macular degeneration and diabetic macular edema.

Graybug’s IPO in September was notably successful; the company started trading at $16 per share, above the $15 originally planned, and sold almost 1 million more shares than first announced.

Biotech firms are famously mercurial as stock investments. They tend to run deep losses for long periods, as medical research is both expensive and impossible to short cut. The rewards, however, are real, as one popular drug, or a treatment that is perceived as essential, can bring in tremendous profits once it goes on the market. That’s the value Needham sees here.

Starting coverage on this stock for Needham is analyst Serge Belanger, who says of GRAY, “Anti-VEGF therapies generate ~$12B in WW sales as the standard of care for retinal diseases despite 40%-50% of patients experiencing inadequate responses and a treatment burden that impacts patient compliance. We believe [the company's] GB-102 can disrupt the anti-VEGF market with a differentiated mechanism of action and longer-dosing intervals. Upcoming ph 2b trial data in 1H21 represent the most near-term value-driving catalyst.”

In line with his outlook, Belanger rates the stock a Buy. His $30 price target represents an impressive 96% upside potential for the year ahead. (To watch Belanger’s track record, click here)

Wall Street agrees that GRAY is a buying proposition. The stock has 6 recent reviews, and all are Buys, making the Strong Buy consensus rating unanimous. Shares are selling for $15.32, and the $32.50 average price target implies an upside of 115%. (See GRAY stock analysis on TipRanks)

Actionable Items

I like to work on investment with potential 300% return in next year or two. So I chose to invest on (Grayview bug)(should be: Graybug vision) inc stock GRAY.