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Goldman Sachs: 2 Stocks That Could Climb Over 90%

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Goldman Sachs: 2 Stocks That Could Climb Over 90%What’s more critical for the stock market’s health than the outcome of the presidential election? A COVID-19 vaccine, so says Goldman Sachs. With Q3 earnings season kicking into gear this week, the firm believes the virus’ effect on fundamentals should be the focus, as opposed to the race to the White House. “The vaccine represents a more important factor than the election result for the path of equities… The consequences of the semi-frozen economy on an uneven road to recovery will be in Q3 results,” Goldman Sachs’ U.S. equity strategist David Kostin commented. Even though elections are a source of uncertainty, research analysts from Goldman Sachs found just a 4% difference in EPS if President Trump is re-elected or the Democrats come out on top. Based on the firm’s analysis, an increase in fiscal spending that is partly funded by increased tax revenue would “boost economic growth, and help offset the earnings headwind from high tax rates.” Taking this into consideration, our attention turned to two stocks that Goldman Sachs thinks have outsized growth prospects, with the firm’s analysts forecasting at least 90% upside potential for each. Using TipRanks’ database, we found out both tickers also sport a “Strong Buy” consensus rating from the rest of the Street. Athira Pharma (ATHA) Applying cutting-edge approaches to neurodegenerative diseases, Athira Pharma wants to improve the lives of patients from all over the world. Given the potential of its asset in Alzheimer’s disease (AD), Goldman Sachs is pounding the table. ATHA made its public market debut on September 18, with the first trade coming in at 17.4% above the IPO price. Raising $204 million, the company sold 12 million shares instead of the 10 million that was originally expected. Writing for Goldman Sachs, analyst Graig Suvannavejh points to its lead candidate, ATH-1017, which is a small molecule activator of HGF/MET currently being evaluated in a Phase 2/3 trial as a treatment for mild-to-moderate AD, as a key component of his bullish thesis. The analyst doesn’t dispute that AD is a difficult indication to address, but tells clients he has high hopes for ATHA. “We’re fully cognizant of the history of AD drug development, and its well documented past of high failure rates. As such, AD-focused companies like ATHA should be considered as having high risk. However, as there still remains a significant lack of effective drugs for AD, we believe alternative approaches to treating AD have merit,” he explained. In the past, the most common therapeutic approaches to AD have been those focused on the belief that the accumulation of disease-causing proteins in the brain leads to AD. However, AD therapeutics based on targeting amyloid have all failed in clinical trials to demonstrate efficacy, with monoclonal antibody (mAb) approaches that target tau, another protein that aggregates in the brains of AD patients, also failing. So, ATHA’s differentiated approach makes it a stand-out, in Suvannavejh’s opinion. Looking at the therapy’s mechanism of action (MOA), it is based on HGF/MET agonism, a strategy that hasn’t been studied in AD before. Additionally, Suvannavejh argues the FDA’s recent decision to review Biogen’s aducanumab for approval even though it was prematurely discontinued in two large Phase 3 studies due to futility is a “sign of a positive regulatory backdrop.” On top of this, the company is applying a new thinking to AD clinical trials. It will use a non-traditional technique (EEG) in order to measure improvements in the brains of AD subjects, and a novel clinical trial end point (Global Statistical Test/GST) that will evaluate the efficacy. It is based on both the ERP biomarker and more traditional efficacy measures (e.g., ADAS-Cog). Weighing in on this, Suvannavejh stated, “With this entirely innovative way of thinking in mind, we think it’s critical to acknowledge that FDA has already provided its sign off to ATHA’s novel clinical trial plan — which importantly also reduces overall time and costs typically associated with AD drug development. Further, given our view that FDA may be experiencing a sense of urgency to get new AD therapeutics in the hands of patients, their caregivers and physicians, we believe the time is right for a candidate like ATH-1017.” When it comes to the revenue potential for ATH-1017, according to Suvannavejh, neurodegenerative diseases represent one of the highest areas of unmet medical need, with it estimated that more than 5 million people over the age of 65 in the U.S. have AD. This number is expected to nearly triple by 2050, based on research from the Alzheimer’s Association. To this end, the analyst projects risk-unadjusted peak 2035 sales of $10.8 billion. Everything that ATHA has going for it convinced Suvannavejh to initiate coverage with a Buy rating. In addition to the call, he set a $53 price target, suggesting 189% upside potential. (To watch Suvannavejh’s track record, click here) Judging by the consensus breakdown, opinions are anything but mixed. With 4 Buys and no Holds or Sells assigned in the last three months, the word on the Street is that ATHA is a Strong Buy. At $42.50, the average price target implies 132% upside potential. (See Athira Pharma stock analysis on TipRanks) Denali Therapeutics (DNLI) Dedicated to defeating neurodegenerative diseases through rigorous therapeutic development, Denali Therapeutics is attracting significant attention from Wall Street. Ahead of a key data readout, Goldman Sachs has high hopes. As the company gears up to report first proof-of-concept biomarker data for DNL310 in Hunter syndrome by YE20, the firm’s Salveen Richter likes what she’s seeing. DNL310 is a recombinant form of the iduronate 2-sulfatase (IDS) enzyme engineered to cross the blood-brain barrier (BBB) using Denali’s enzyme transport vehicle (ETV) technology, which enables the trafficking of large molecules into the brain. DNLI is set to publish initial data from Cohort A, and management expects the starting dose of 3mg/kg to reduce CSF GAGs by 50% at eight weeks. A second Cohort B will evaluate DNL310 in a broader range of patients, with dose escalation levels based on findings from Cohort A. Richter points out a 50% reduction in CSF GAGs was associated with a decrease in lipid lysosome and neurofilament light (NfL) chain accumulations that are associated with neuronal degeneration and injury. “While this is the first in-human trial for DNL310, we see the pre-clinical data as strongly supportive of the anticipated therapeutic benefit and potential for GAG reduction in the CSF to drive downstream changes in lysosomal lipid and NfL accumulation (i.e. prevent neuronal dysfunction and injury) for improved cognition and function,” Richter commented. It should be noted that the preclinical and early clinical data for JCR Pharmaceuticals’ JR-141, a BBB-penetrant fusion protein that also leverages receptor-mediated transcytosis to traffic iduronate-2-sulfatase (I2S) to the brain, de-risks the approach, in Richter’s opinion. To this end, the five-star analyst believes positive DNL310 biomarker data could serve as proof-of-concept for DNLI’s transport vehicle (TV) technology. The platform’s modularity could allow for various large molecules to be transported across the BBB, for a range of other neurodegenerative indications like Parkinson’s disease (PD) and frontotemporal dementia (FTD). On top of this, DNLI could leverage this delivery platform for antibodies, proteins or enzymes not currently in its own portfolio, with increasing interest on assets from Biogen, according to Richter. In line with her optimistic approach, Richter stayed with the bulls, reiterating a Buy rating. She also bumped up the price target from $41 to $60. Investors could be pocketing a gain of 36%, should this target be met in the twelve months ahead. (To watch Richter’s track record, click here) Looking at the consensus breakdown, 6 Buys and 2 Holds have been issued in the last three months. Therefore, DNLI gets a Strong Buy consensus rating. Based on the $51.17 average price target, shares could surge 16% in the next year. (See Denali Therapeutics stock analysis on TipRanks) Disclaimer: The opinions expressed in this article are solely those of the featured analysts. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.


Lyron Foster is a Hawaii based African American Musician, Author, Actor, Blogger, Filmmaker, Philanthropist and Multinational Serial Tech Entrepreneur.

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Investors in what could be world’s biggest IPO must commit amid U.S. election uncertainty

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Jack Ma’s Ant Group Co. is asking buyers of what could be the world’s biggest-ever initial public offering to commit to the deal just days before the U.S. presidential election.

The Chinese fintech giant will price the Shanghai portion of its dual listing on Oct. 27 and allow subscriptions on Oct. 29, it said in a prospectus published on Wednesday. The deadline for payments will be Nov. 2. Ant hasn’t yet spelled out dates for the Hong Kong leg of the IPO, but they’re expected to be similar.

While the company’s share sale is among the most hotly anticipated deals in years, the timeline will leave investors in a potentially precarious position: locked in during a pivotal week for global markets. Shares will almost certainly start trading only after the U.S. vote on Nov. 3, an event that could have big ramifications for both Ant’s overseas expansion plans and investor risk-appetite generally.

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Ant won regulatory approval for its Shanghai listing on Wednesday, clearing the way for it to begin guaging investor demand for an IPO that could value the Hangzhou-based company at $280 billion or more. It’s planning to raise about $35 billion from the dual listing, surpassing Saudi Aramco’s record $29 billion sale last year, people familiar with the matter have said.

An Ant representative declined to comment.

The company will issue no more than 1.67 billion shares in China, equivalent to 5.5% of the total outstanding before the so-called greenshoe option, according to its prospectus on the Shanghai stock exchange. It will issue the same amount for its Hong Kong offering.

Alibaba Group Holding Ltd., which was co-founded by Ma and currently owns about a third of Ant, has agreed to subscribe for 730 million of the company’s Shanghai shares, which will be listed under the ticker “688688,” according to the prospectus.

Singapore’s sovereign wealth fund GIC Pte, Temasek Holdings Plc and China’s $318 billion National Council for Social Security Fund are also planning to invest, people familiar with the matter said earlier this month.

That strong demand means Ant may fetch a valuation equivalent to Bank of America Corp. and Goldman Sachs Group Inc. combined, despite concern that rising geopolitical risks could hamper the Chinese company’s international ambitions. Ant reported a 74% jump in gross profit to 69.5 billion yuan ($10.4 billion) from January to September, according to its prospectus.

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Former Apple design chief Jony Ive is working for Airbnb

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Airbnb Inc. is hiring former Apple Inc. design chief Jony Ive and his new firm, LoveFrom, to work on projects with the home-sharing startup.

The San Francisco-based company, which is planning to go public later this year, on Wednesday said the multiyear deal will be a “special collaboration” that will see Ive and his firm help develop Airbnb’s internal design team. In a blog post announcing the move, Airbnb Chief Executive Officer Brian Chesky said he and Ive are longtime friends.

Airbnb has pushed design to differentiate itself in the online rental booking space. The company has its own typeface and highlights redesigns to its website and mobile apps. It also has a Backyard group within its Samara experimental product team that is developing homes. Ive’s expertise in product design could assist those efforts.

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At Apple, Ive was responsible for the design of several generations of the iPhone, iPad, Mac and Apple Watch and was known as Apple co-founder Steve Jobs’s “spiritual partner.” He was also key in the design of Apple’s new Cupertino, California campus and redesigns to retail stores.

Ive has also pursued personal projects, designing traditional cameras, a diamond ring that sold for over $250,000, a modern desk, Christmas tree and bathroom appliances. Ive launched his new company, LoveFrom, with Marc Newson, another veteran designer who worked on a few projects at Apple.

Airbnb did not disclose the financial details of its agreement with Ive. He isn’t the first former Apple designer to partner with Airbnb. Miklu Silvanto, who worked under Ive at Apple for years, was the head of interaction and industrial design for Airbnb’s Samara group for about a year. He left in April.

Ive left Apple last year, and Airbnb is one of the first companies to say it’s working with him. Apple previously said it would continue collaborating with Ive via his new company. Angela Ahrendts, who also left Apple last year after running its retail operations, is on Airbnb’s board of directors.

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Ripple releases shortlist of 5 countries it might move to if U.S. regulation remains unclear

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Ripple Labs Inc. has formed a shortlist of countries to move to should the blockchain payment services company leave the U.S. amid a lack of regulatory clarity there, its top executive said.

Japan, Singapore, Switzerland, the U.K. and the United Arab Emirates are potential destinations, Chief Executive Officer Brad Garlinghouse said in an interview.

“The common denominator between all of them is that their governments have created a clarity about how they would regulate different digital assets, different cryptocurrencies,” he said.

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Speaking in a separate interview with Bloomberg Television, Garlinghouse said U.S. authorities are unclear on the status of cryptocurrencies, with different opinions over whether they are a commodity, a currency, a property or a security.

“Regulation shouldn’t be a guessing game,” he said. “Ripple is definitely a proud U.S. company and we’d like to stay in the U.S. if that was possible, but we also need regulatory clarity in order for us to invest and grow the business.”

Garlinghouse said the coronavirus pandemic has given a “tailwind” to cryptocurrency markets because central banks have been printing fiat currency, which is “inflationary on some level.” A move away from cash is also helping, he said.

Ripple offers payments and settlement services through the virtual currency known as XRP and other platforms.

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