A new report out this week by Chardan Capital Management focuses on three biotech stocks that the firm has been watching lately. Chardan analyst Gbola Amusa gives his take on the recent developments at each company and how traders should play the stocks.

Axovant Sciences Ltd AXON 2.37%

Amusa believes that the market’s expectations for RVT-101 are way too high. Amusa sees potential exclusion criteria and fierce competition as limiting factors when it comes to the potential of RVT-101.

“In addition to consensus not adequately modeling RVT-101’s late-stage and 5-HT6 antagonist competition, we believe consensus does not yet appreciate the potential for a narrower label for AXON’s compound,” Amusa explained. He notes that the the FDA has not approved a single new molecular entity (NME) for treatment of Alzheimer’s disease since 2003. Chardan has a Sell rating on Axovant’s stock.

Avalanche Biotechnologies Inc AAVL 0.07%

Amusa sees…

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