Maxim Group Declares OncoSec Medical, Inc. (NASDAQ:ONCS) to Still a “Buy”. Where Will the Stock Go From Here?

Shares of pharmaceutical company, OncoSec Medical, Inc. (NASDAQ:ONCS) rallied late last week after Jason McCarthy, a Maxim Group analyst declared the stock a “Buy”.

Shares of OncoSec Medical Incorporated (ONCS) rallied more than 4% on Friday, Oct. 14, after Maxim Group analyst Jason McCarthy reiterated a “Buy” rating on the pharmaceutical stock.

The analyst slashed his price target from $17 to $5 and delayed expectations for the commercialization of a key cancer immune therapy. With the stock closing at $1.81 on Friday, McCarthy’s price target still represents upside of 176%. (See also: The Cancer (and Other Drug) Shortage.)

The Buy reiteration came a day after the firm reported a wider fourth-quarter loss than analysts had expected. The firm reported a net loss of $6.6 million or a -$0.39 loss on a per-share basis.

By comparison, the firm reported an EPS loss of -$0.40, or a net loss of $6.5 million, in the fourth quarter of 2015. Analysts largely ignored the loss and cheered news that the company’s study for its cancer treatment ImmunoPulse remains on schedule.

“Subject to these interim results and discussions with the U.S. Food and Drug Administration, we expect to submit a registration directed study design for ImmunoPulse® IL-12 by the end of 2016,” said OncoSec CEO Punit Dhillon.

McCarthy’s analysis on OncoSec centers on changes to his firm’s model to reflect new assumptions the pricing and competitiveness of Immunopulse and the timing its commercialization of its immunotherapy products. (See also: Will Immunotherapy Disrupt The Oncology Market?)

In his analysis, McCarthy says he pushed back the timing of commercialization from 2020 to 2022. “While the phase II data in melanoma as a monotherapy is positive, it is clear that a combination study with a checkpoint modulator makes sense and would be consistent with the direction in which we see immune-oncology heading,” McCarthy writes. “So while a small investigator-sponsored phase II study in combination with Keytruda is ongoing, it is still early in the complex development process of cancer immune therapy.”

McCarthy also says that increased bearishness in the biotech sector weighed on the target cut. “We have adjusted our model (and lowered our price target) to reflect both the bearish biotechnology environment and the increasingly competitive and evolving cancer immune therapy marketplace,” he concluded.

According to TipRanks, McCarthy has a success rate of 38% and an average return of negative -4.3%. H.C. Wainwright Ram Selvaraju also reiterated a “Buy” rating on ONCS on Friday and set a price target of $6 per share.

The consensus price target of $5.50 represents upside of 203.87%.

The stock is trading at $1.81, well below its 52-week high of $4.61. Its current level is 4% above its 50-day moving average of $1.74. (See also: OncoSec Sets Fourth-Quarter Conference Call.)

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OncoSec Medical, Inc. (NASDAQ:ONCS) shares have moved -1.66% on the news thus far today and have traded in the range of $1.67 – 1.92 during the current session. In order to take a look at where the stock might be headed longer term, investors often look to research firms that cover the stock. Sell-side research firms currently have a consensus one-year price target of $7.33 on the stock.  This is according to brokerage analysts polled by Thomson Reuters First Call.  The sell-side analysts are projecting earnings per share of $-0.34 for the next fiscal quarter.  For the current year, analysts are predicting earnings of $-1.59 per share according to First Call.

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In looking at where the stock is trading on a technical level, the stock is trading +3.37% away from its 50-day moving average of $1.72.  Based on the most recent available data, the equity is -60.00% off of its 52-week high of $4.45 and +30.88% away from its 52-week low which is $1.36.

Today, the stock opened at $1.85 and the last bid at the time of writing stood at $1.78.  During the session thus far, the equity dipped down to $1.67 and touched $1.92 as the high point.  OncoSec Medical, Inc. (NASDAQ:ONCS) has a market cap of $31.39M and has seen an average daily volume of 120617 over the past three months.

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