Biopharma stocks are risky bets that could fetch disproportionate gains or wipe away one’s entire investment thanks to their vulnerability to catalytic events.
The iShares Nasdaq Biotechnology Etf (NASDAQ: IBB) has gained about 20% year-to-date period compared to the roughly 9.3% advance by the S&P 500 Index.
Biotechs have underperformed the Nasdaq Composite Index, which gained about 32% in the same period.
As we enter the last leg of the year, the following are fourth-quarter catalysts highlighted by Needham for the biotech stocks in the firm’s coverage universe.
Alnylam Pharmaceuticals, Inc. (NASDAQ: ALNY)
Year-to-date gains: +27.6% Key catalysts: PDUFA date of Dec. 3 for lumasiran to treat primary hyperoxaluria type 1, and a December decision for out-licensed hypercholesterolemia drug inclisiran Average analyst price target*: $163.87, suggesting roughly 12% upside
* based on Yahoo database
Crispr Therapeutics AG (NASDAQ: CRSP)
Year-to-date gains: +63% Key catalysts: Phase 1/2 trial of CTX110 in relapsed, refractory non-Hodgkin lymphoma, and additional Phase 1/2 data for CTX001 in sickle cell disease and beat thalassemia (both scheduled for the fourth quarter) Average analyst price target: $96.20, suggesting roughly 3.2% downside
Needham analyst Alan Carr differs with the consensus.
“We believe there is more room for upside for the stock, particularly if the company demonstrates an acceptable safety profile and at least similar efficacy of CTX110 to autologous CAR-T cells,” the analyst said in a note.
Rhythm Pharmaceuticals Inc (NASDAQ: RYTM)
Year-to-date gains: +8% Key catalysts: FDA decision for setmelanotide in POMC and LEPR deficiency obesities (Nov. 27), Phase 3 data for setmelanotide in Bardet-Biedl and Alstrom syndromes (year-end 2020) and additional results from setmelanotide Phase 2 basket trial (fourth quarter) Average analyst price target: $32.88, suggesting roughly 32.6% upside