Ascendis Pharma is Tuesday's pick for IBD 50 Stocks To Watch as it works its way up to a buy point in a flat base. The stock's superior sales growth helped it make the elite list of growth stocks.
The Danish biotech develops treatments for cancers, endocrine diseases and other rare diseases. Its trademark TransCon technologies is a platform used to develop drugs combining biology and technology striving to enhance efficacy, improving tolerability and caregiver convenience.
Ascendis Pharma's main U.S. patented drug, Skytrofa, is a pediatric human growth hormone used for the treatment of growth hormone deficiency in those over one year old. It was approved for medical use in the U.S. in August 2021 and the EU in January 2022.
On Jan. 31, Ascendis announced that its Yorvipath, a treatment for parathyroid hormone replacement therapy, was available in Germany and Austria.
Its pipeline of potential treatments include adult thyroid therapies, cancerous tumor drugs and a bone growth drug.
In January Ascendis announced it and outside investors launched Eyconis, a company to develop, manufacture and sell its TransCon eye products.
Ascendis is based Copenhagen, Denmark, and has offices in Germany and the U.S. The stock is in the biotech group, which ranks No. 13 out of the 197 IBD industry groups.
JPMorgan raised its price target to 167 from 165 and maintained its overweight rating on the growth stock on Tuesday.
Biotech Growth Stock Climbing In A Base
Ascendis Pharma is in a second-stage flat base with a 161 buy point. Shares are about 9% below the buy point.
The growth stock is above its 50-day moving average after several tests of the line as the base develops. It reclaimed its 21-day exponential moving average on March 26. Its relative strength line is bumpy but trending sideways.
Shares have gained around 19% in 2024 and 40% since they broke out of a cup base in early December.
Huge Sales Growth Expected To Continue
Ascendis Pharma hasn't had a profitable year since 2018, according to MarketSurge. That's common with biotech companies, because they invest heavily in research and development and may spend years working on products before they reach their markets.
Its quarterly losses are diminishing, trending in the right direction.
But it has shown tremendous sales growth. Revenue growth exploded with a 520% rise in its fourth quarter, reported on Feb. 7. Sales soared 239% to 701% the previous four quarters.
Quarterly sales are expected to grow 136% in the first quarter, with 90% and 158% estimates in the following two quarters, according to MarketSurge.
The growth stock has a respectable 84 Composite Rating but a lackluster 33 Earnings Per Share Rating as it continues to post losses. Its Accumulation/Distribution Rating of A- indicates fairly heavy institutional buying over the last 13 weeks.
Mutual funds own 75% of the growth stock with 386 funds owning shares in March, up from 265 in December.
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