Why Ariad Pharmaceuticals Gained Again

Watch stocks you care about

The single, easiest way to keep track of all the stocks that matter...

Your own personalized stock watchlist!

It's a 100% FREE Motley Fool service...

Click Here Now

While Fools should generally take the opinion of Wall Street with a grain of salt, it's not a bad idea to take a closer look at particularly stock-shaking upgrades and downgrades -- just in case their reasoning behind the call makes sense.

What: Shares of Ariad Pharmaceuticals¬† (NASDAQ: ARIA  ) popped more than 10% this morning after Chardan Capital upgraded the biotech from neutral to buy.

So what: Along with the upgrade, analyst Ling Wang planted a price target of $9 on the stock, representing about 40% worth of upside to Friday's close. The stock surged last week after the FDA OK'd the return of its leukemia treatment Iclusig to the U.S., but Wang believes there's plenty of room to run given the drug's untapped sales potential.

Now what: Chardan expects Ariad to generate Iclusig sales between $220 million and $240 million by 2019. "Iclusig updated label in the U.S. is much narrower than the original label," noted Chardan. "We expect physicians to largely reserve Iclusig in the refractory setting until patients progresses on all approved therapies in patients without T315I mutation, and potentially use Iclusig as a preferred second line therapy for patients with T315I mutation." More important, with the stock still a whopping 70% from its 52-week highs, biotech-savvy Fools (who are tolerant of plenty of risk) might have room to buy into that bullishness. 

More compelling biotech picks
The best way to play the biotech space is to find companies that shun the status quo and instead discover revolutionary, groundbreaking technologies. In the Motley Fool's brand-new FREE report "2 Game-Changing Biotechs Revolutionizing the Way We Treat Cancer," find out about a new technology that big pharma is endorsing through partnerships, and the two companies that are set to profit from this emerging drug class. Click here to get your copy today.

Read/Post Comments (0) | Recommend This Article (11)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2775044, ~/Articles/ArticleHandler.aspx, 10/1/2016 3:23:00 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated 18 hours ago Sponsored by:
DOW 18,308.15 164.70 0.91%
S&P 500 2,168.27 17.14 0.80%
NASD 5,312.00 42.85 0.81%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

9/30/2016 4:00 PM
ARIA $13.69 Down -0.02 -0.15%
Ariad Pharmaceutic… CAPS Rating: **