Analysts love these biotech stocks in 2021.
Small- and mid-cap biotech stocks are among the most high-risk, high-reward stocks in the market. Many of these companies are developing drug candidates that could ultimately address multibillion-dollar markets. Market catalysts are important for any investor to monitor, but they are particularly important for biotech stock investors. One batch of trial data or approval or rejection by the U.S. Food and Drug Administration can send a biotech stock soaring or plummeting in a matter of minutes. Here are eight biotech stocks to buy with major catalysts ahead in 2021, according to Bank of America analysts.
Sage Therapeutics (ticker: SAGE)
Sage Therapeutics is a biotech stock focused on the central nervous system. Analyst Tazeen Ahmad says Sage will report data from its Waterfall trial of zuranolone in major depressive disorder in the first half of 2021. If the data is positive, Ahmad says Waterfall and two additional sets of pivotal Sage data expected for release in the second half of 2021 could potentially lead to FDA filings. Ahmad is also anticipating data from Sage’s phase 2 Kinetic study in treating essential tremor in early 2021. Bank of America has a “buy” rating and a $97 price target for SAGE stock.
Argenx is a biotech company developing therapies for autoimmune disease and cancer. Ahmad says Argenx will likely be transitioning from development to the commercial stage in 2021 after the FDA approves lead drug candidate efgartigimod for treatment of generalized myasthenia gravis later this year. Ahmad anticipates additional filings in Japan in the first half of the year and Europe in the second half. She says investors can expect updates on other potential indications for efgartigimod, including trials in treating immune thrombocytopenia and polycythemia vera. Bank of America has a “buy” rating and a $350 price target for ARGX stock.
Alnylam Pharmaceuticals (ALNY)
Alnylam is a biotech company developing gene-silencing therapies. In the first half of 2021, Alnylam plans to file a new drug application with the FDA for Vutrisiran in treating hereditary transthyretin amyloidosis polyneuropathy. Ahmad says 18-month data from Alnylam’s HELIOS-A trial in late 2021 could help validate Vutrisiran’s potential in cardiomyopathy as well. She says expansion into cardiomyopathy and subcutaneous administration are two major potential growth drivers for Alnylam. Investors should also monitor data from gene editing competitor Intellia Therapeutics (NTLA) this year. Bank of America has a “buy” rating and a $184 price target for ALNY stock.
Fate Therapeutics (FATE)
Fate Therapeutics is a clinical-stage biotech company developing cell therapies utilizing pluripotent stem cells. Ahmad says investors should watch for an update on Fate’s acute myeloid leukemia program in the second quarter. After that, Ahmad expects updates on lymphoma shortly thereafter followed by solid tumors in the third quarter and myeloma in December. Ahmad is also anticipating an investigational new drug filing for FT819 in solid tumors this year as well as the first product from Fate’s collaboration with Johnson & Johnson (JNJ). Bank of America has a “buy” rating and a $115 price target for FATE stock.
Incyte focuses on the development of proprietary therapeutics. Ahmad says 2021 should be a huge year for Incyte, including seven potential FDA approvals and six new submissions worldwide. Ahmad is particularly focused on ruxolitinib cream treatment for atopic dermatitis, which has a June 21 Prescription Drug User Fee Act date. She says she is impressed with ruxolitinib’s efficacy data up to this point and says the cream could be a “significant value driver” for Incyte in the long term. Bank of America has a “buy” rating and a $110 price target for INCY stock.
Apellis Pharmaceuticals (APLS)
Apellis Pharmaceuticals focuses on the inhibition of the complement system for autoimmune and inflammatory diseases. Ahmad is anticipating FDA approval of Apellis’ lead asset pegcetacoplan in paroxysmal nocturnal hemoglobinuria by its May 14 PDUFA date, but the scope of the labeling is also important. She says Apellis should then transition to the commercial stage with pegcetacoplan in the second half of the year. Also, Ahmad says the data from the Derby and Oaks clinical trials in geographic atrophy will be a key 2021 catalyst. Bank of America has a “buy” rating and a $62 price target for APLS stock.
Sarepta Therapeutics (SRPT)
Sarepta Therapeutics develops treatments for rare muscle disorders, such as Duchenne muscular dystrophy and limb-girdle muscular dystrophy. Ahmad is bullish on Sarepta because its exon-skipping franchise should provide downside support for the stock while its gene therapy portfolio provides potential growth upside. Sarepta should report biomarker and safety data from the commercial-supply study of its SRP-9001 gene therapy in the second quarter. Ahmad also expects data updates on SRP-5051 in May. Bank of America has a “buy” rating and a $135 price target for SRPT stock.
Neurocrine Biosciences (NBIX)
Neurocrine Biosciences is a commercial-stage biotech company with two drugs already on the market — Ingrezza for tardive dyskinesia and Ongentys as an adjunctive treatment for Parkinson’s disease. The company reported $993 million in fiscal 2020 Ingrezza sales and $1 million in Ongentys sales since its September launch. Ahmad says Neurocrine should report data on its phase 3 registrational study of Ingrezza for chorea in Huntington’s disease in the fourth quarter. She also anticipates that Neurocrine will initiate several new trials throughout 2021. Bank of America has a “buy” rating and a $128 price target for NBIX stock.
Eight biotech stocks to buy in 2021:
— SAGE Therapeutics (SAGE)
— Argenx (ARGX)
— Alnylam Pharmaceuticals (ALNY)
— Fate Therapeutics (FATE)
— Incyte (INCY)
— Apellis Pharmaceuticals (APLS)
— Sarepta Therapeutics (SRPT)
— Neurocrine Biosciences (NBIX)
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Update 03/12/21: This story was published at an earlier date and has been updated with new information.