No one gossips about other people’s secret virtues.” ― Bertrand Russell

The biotech sector was off nearly one and a half percent in trading yesterday.Investors are waiting to hear the details of the administration’s new initiative to reduce drug prices by pegging Medicare reimbursement to the lowest ex-U.S. prices from a select group of countries and the sector might be stalled until details from that new initiative are known.

While we look to end up the trading week on a up note, here are four small biotech concerns getting positive analyst commentary this morning.

Late yesterday, Stifel Nicolaus upgraded Rhythm Pharmaceuticals (RYTM) to a new Buy with a $34 price target.Stifel's analyst 'sees an attractive entry point into the shares given setmelanotide's positive Phase 2 data, which he says demonstrated a meaningful benefit on weight loss and hunger scores. Both Phase 3 studies, expected in Q3, will likely be positive and a "homerun" scenario could move the stock to the low $40 range'.

Oppenheimer is initiating Fate Therapeutics (FATE) as a new Outperform with a $27 price target this morning.Oppenheimer's analyst states 'he believes Fate's induced pluripotent stem cell technology could fundamentally disrupt the emerging field of cancer cell therapy, and feels the iPSC platform could serve as a renewable and efficient source of off-the-shelf genetically engineered T and NK cell therapies.The analyst says he views the next 12-18 months as potentially transformative for Fate, as it advances several iPSC-derived therapies into clinical trials.'Next up is Redhill Biopharma (RDHL).The Israeli based biopharma concern is upgraded to a Buy rating and $17 price target at WBB securities who issues this view of the company.

We are predicting that the FDA will approve TALICIA based on a standard-of-care designation. Standard-of-care is the treatment that is accepted by medical experts as proper for a given disease and that is widely used by healthcare professionals. It also is called best practice, standard medical care, and standard therapy. In a lawsuit, the plaintiff must demonstrate that standard-of-care was not applied. With that ability to supplant all other therapy alternatives, TALICIA becomes the proverbial go to drug for the treatment of H. pylori. We are therefore upgrading RDHL from a Buy rating to a Strong Buy rating with a 12-month price target of $17.00 TALICIA will enter a lucrative market, estimated at $1.4 billion in the U.S. and $4.8 billion globally.”

Finally, H.C. Wainwright reiterates Novan (NOVN) as a Buy with a $6 price target and the following commentary.

Our $6 12-month target is based on a probability of success (POS) weighted DCF. We assume SB206 (topical NO for molluscum; peak over $250M sales) and SB204 (topical NO for acne; peak over $150M sales) launch in late 2021 and 2022, respectively. We project the company commercializes both products itself. We do not include any other pipeline contribution yet, or any potential ex-US partnership revenue. We project Novan profitability in 2024.”

And those are four small cap concerns ending the week with some encouraging comments from the analyst community.

Men are more easily governed through their vices than through their virtues.” ― Napoleon Bonaparte

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