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Is This Mid-Cap Biotech Stock a Buy Now?

By Eric Cuka – Jul 29, 2021 at 7:00AM

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This mid-cap growth stock could be a long-term winner.

Kodiak Sciences (KOD -2.68%) is a mid-cap biotech business building a drug portfolio focused on retina therapeutics. The Palo Alto, California based company has an approximate market cap of $4.5 billion. Kodiak launched its IPO in 2018, and it has been heads down pushing its pipeline through clinical trials since. 

One of the company's focus areas is the global "wet AMD" market, where it faces direct competition from Regeneron's (REGN -1.43%) Eylea (aflibercept) injection. The global wet AMD market is estimated to have a total addressable market of $10.4 billion by 2024. Kodiak's KSI-301 has proven to help with wet AMD, but also with diabetic macular edema and retina vein occlusion. Because of this, the chances of drug approval seem very high. In fact, the company's website shows four primary areas in phase 3 for KSI-301: wet age-related macular degeneration, diabetic macular edema, retinal vein occlusion, and diabetic retinopathy. 

Kodiak reported a $50.4 million net loss in its most recent quarter, but it does have a healthy balance sheet. As of March 31, 2021, Kodiak Sciences held $930 million in cash, cash equivalents, and market securities. This should be plenty of cash to get the company through its primary clinical studies. 

In late June of 2021, well-known biotech investor Julian Baker purchased around 250,000 shares of KOD. Kodiak's stock has a 52-week high of $171.21 and a 52-week low of $45.02. Analyst price targets range from $86 to $160, so there's significant upside from its current $89 price level. The company reports earnings on Aug. 9, 2021, which is something to consider when investing. Of course, earnings aren't expected to grow until KSI-301 is approved, produced, and distributed, which will be 2022 at the earliest. 

In the below video, I discuss Kodiak Sciences in more detail, covering fundamental analysis and providing technical analysis with opinions and predictions on where I think the stock price is headed. Is Kodiak Sciences a good speculative add in your long-term growth portfolio? Please watch for more info. 

*Stock prices used in the below video were during the trading day of July 28, 2021. The video was published on July 28, 2021.

Eric Cuka owns shares of ARK ETF Trust-ARK Genomic Revolution ETF. The Motley Fool owns shares of and recommends Kodiak Sciences Inc. The Motley Fool has a disclosure policyEric is an affiliate of The Motley Fool and may be compensated for promoting its services. If you choose to subscribe through his link, he will earn some extra money that supports his channel. His opinions remain his own and are unaffected by The Motley Fool.

Stocks Mentioned

Kodiak Sciences Inc Stock Quote
Kodiak Sciences Inc
$7.26 (-2.68%) $0.20
Regeneron Pharmaceuticals Stock Quote
Regeneron Pharmaceuticals
$755.45 (-1.43%) $-10.94
ARK ETF Trust - ARK Genomic Revolution ETF Stock Quote
ARK ETF Trust - ARK Genomic Revolution ETF
$31.48 (-4.55%) $-1.50

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

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