For investors seeking out the ultimate high-risk, high-reward stocks, look no further than the biotech industry. Unlike companies that build up their businesses over time at a steadier pace, biotechs rely on just a few studies or trials of their therapies. As a result, favorable outcomes can catapult share prices upwards. An upset, however, can have the opposite effect.
This is why it’s essential to do your homework before investing in these often difficult-to-gauge stocks. That’s where TipRanks.com comes in. Using the platform, I was able to get access to a host of in-depth market data to help me pinpoint the most compelling investment opportunities in the biotech space.
To this end, I found not one, not two, but five biotech stocks poised for huge gains in the long-run. I’m not kidding when I say “huge.” I’m referring to more than 80% upside potential from the current share price. Not to mention each has received enough bullish recommendations in the last three months to earn a “strong buy” consensus rating.
Here’s the play-by-play.
Akebia Therapeutics (AKBA)
About 37 million people in the U.S. are affected by chronic kidney disease (CKD). With its commercially available drug, Auryxia, and its other candidate, Vadadustat, in global Phase 3 clinical development, Akebia Therapeutics (NASDAQ:AKBA) wants to provide new treatment options for patients suffering from the disease.
While Auryxia sales in its most recent quarter have posed a cause for concern, Piper Jaffray analyst Christopher Raymond is staying onboard. During its third quarter, Auryxia sales came in at $30 million, $2 million less than the five-star analyst estimated. While definitely not the ideal result, the fact of the matter remains that Auryxia has a more important role as a vehicle for Akebia to establish a commercial platform from which to release the “real value driver – Vadadustat.”
With respect to AKBA’s Vadadustat program, both the INNO2VATE and PRO2TECT studies are fully enrolled, meaning that it is on track to report top-line data in Q2 of 2020 and mid-2020, respectively. In two of the drug’s Phase 3 pivotal studies conducted by its collaboration partner in Japan, MTPC, data showed that Vadadustat’s effect on hemoglobin was sustained in patients with anemia due to CKD, a positive result in terms of efficacy.
Bearing this in mind, Raymond maintained his bullish thesis but did reduce the price target from $22 to $15. Despite this drop, this target implies that shares could soar 208% over the next twelve months.
Like Raymond, the rest of the Street is betting on this biotech stock. As four “buy” ratings have been assigned in the last three months compared to no “holds” or “sells,” the consensus is unanimous: AKBA is a “strong buy.” In addition, the $16 average price target indicates 218% upside potential. See the AKBA stock analysis.
Aerie Pharmaceuticals (AERI)
Aerie Pharmaceuticals (NASDAQ:AERI) is an ophthalmic pharmaceutical company developing innovative treatments for patients with glaucoma and retinal diseases. Despite the major hit shares have taken year-to-date, some analysts argue that AERI is under-appreciated on Wall Street.
Part of the problem stems from the company’s performance in its most recent quarter. Not only did AERI post an earnings miss, but it also cut its 2019 sales guidance for the second consecutive quarter.
However, according to Piper Jaffray’s Joseph Catanzaro, there is a positive takeaway from all this. He tells investors that management’s outlook for the short-term has become much more “realistic.” The analyst adds that he sees little evidence to demonstrate that there has been a reversal in quarterly script trends observed for Rhopressa and Rocklatan, its glaucoma drugs.
As a result, Catanzaro kept his “overweight” rating while lowering the price target from $53 to $48. Still, this target conveys his confidence in AERI’s ability to climb 159% higher in the next twelve months.
All in all, other Wall Street analysts take a similar approach when it comes to AERI. Based on the seven “buys” and no “holds” or “sells” received in the last three months, the bulls have it and the consensus is that the stock is a “strong buy.” On top of this, its $42 average price target puts the potential twelve-month gain at 129%. See the AERI stock analysis.
A leader in muscle biology research, Cytokinetics, Inc. (NASDAQ:CYTK) specializes in muscle activators and muscle inhibitors to treat conditions and diseases characterized by muscle weakness, fatigue or diminished muscle function. On the heels of promising new data presented by the company, investor focus has locked in on this biotech.
Investors got some good news back in September when CYTK presented data from the Phase 1 study of its CK-274 drug in healthy patients at the annual Heart Failure Society of America (HFSA) meeting. As these results indicated favorable findings in terms of safety and tolerability, CYTK can move forward with its Phase 2 clinical trial to evaluate the drug’s effectiveness in patients with obstructive hypertrophic cardiomyopathy (HCM). HCM is an inherited condition that causes part of the heart to get thicker, affecting its ability to pump blood. Given the limited available options in terms of treating heart failure, the drug’s implications could fuel massive growth.
This outcome prompted a wave of bullish calls to be published, five to be exact. Based on the 100% Street support, the message is clear: CYTK is a “strong buy.” Not to mention its $23 average price target suggests there’s room for 146% upside from the current share price.
One of the analysts singing the biotech’s praises is H.C. Wainwright’s Joseph Pantginis. Along with his recent “buy” rating, the analyst set a $30 price target, the highest out of the analysts covering the name in the last three months. This means he sees a whopping 216% potential twelve-month gain in store. See the CYTK stock analysis.
Yes, Novavax (NASDAQ:NVAX) is definitely down, but don’t count this biotech out just yet. The company, which is best known for producing vaccine candidates, is completely surrounded by bulls. I mean to say that all of the analysts that have covered the stock in the last three months issued a “buy” recommendation, which could be a signal that something positive is around the corner.
Oppenheimer analyst Kevin DeGeeter believes that this is in fact the case in spite of the recent headwind it faced. After the company filed an 8-K disclosing that the EMA declined to support use of the conditional marketing authorization pathway for approval of ResVax, its aluminum adjuvanted respiratory syncytial virus (RSV) fusion (F) protein recombinant nanoparticle vaccine, in the EU, approval without another clinical trial seems unlikely.
However, DeGeeter reminds investors that he is expecting a positive Phase 3 outcome for NanoFlu in the first quarter of 2020. He argues that this could be a potential catalyst for shares. As a result, he remains optimistic about NVAX.
In just the past week, H.C. Wainwright’s Vernon Bernardino also decided to stay on board. Along with his bullish call, the $17 price target indicates shares could jump a whopping 350% in the next twelve months.
While Bernardino’s forecast implies huge upside potential, based on the $23 average price target the Street sees even more. We’re talking 512% here. See the NVAX stock analysis.
Translate Bio (TBIO)
Translate Bio (NASDAQ:TBIO) is pioneering a new approach to treating disease with messenger RNA, with its lead candidate in development for the treatment of cystic fibrosis (CF), a hereditary disease impacting the lungs and digestive system. With the disease affecting 30,000 people in the U.S., there’s a huge unmet need.
The company has found itself in hot water recently following its decision to terminate its preclinical OTC deficiency program to treat liver disease based on disappointing data.
“We believe that the success to date in our cystic fibrosis program positions us well to build on our lung delivery platform and maximize the potential of our mRNA technology in additional pulmonary diseases with unmet medical need,” CEO Ronald Renaud stated.
While this took a toll on shares, Leerink Partners analyst Geoff Porges argues that he views this news as a positive. “It is encouraging to see TBIO commit to this platform and the CF program and is consistent with the groundbreaking potential of its lung LNP delivery system. The decision to abandon the OTCD program was probably relatively easy given the challenges associated with that indication for TBIO and other developers,” he noted. To this end, he maintained his bullish call and $20 price target, putting the upside potential at 98%.
With 100% Street support, the word on the Street is that TBIO is a “strong buy.” Additionally, its $18 average price target suggests a potential twelve-month gain of 81%. See the TBIO stock analysis.
TipRanks offers investors the latest insight into eight different sectors by tracking the activity of over 5,000 Wall Street analysts. As of this writing, Maya Sasson did not hold a position in any of the aforementioned securities.