Biotech stocks are naturally an exciting area for investment. Just one therapeutic breakthrough can change the whole trajectory of the company. Millions of dollars, partnerships with big-name pharmaceuticals, or even a buyout can follow. However it entails a lot of risk. The Piper Sandler (NYSE:PIPR) investment firm says it found three biotech stocks with the winning ticket. These Piper Sandler stocks have investors curious.
Piper Sandler may be the best bet for investors especially when you see where things are for biotech companies. The breakthrough drug discovery process can fail miserably. According to the American Society for Biochemistry and Molecular Biology, 90% of all drug candidates in clinical trials fail. Ouch!
Despite spending $1 billion on average, and waiting 10 to 15 years, most biotechs come up with nothing. That’s why when they do succeed it is like hitting the lottery, because they have.
Piper Sandler believes they can post triple-digit returns over the next year. These Piper Sandler stocks are expected to grow by at least 100% in the next 12 months. Let’s see why they feel confident these Piper Sandler stocks will double in price.
Piper Sandler Stocks to Buy: Context Therapeutics (CNTX)
Context Therapeutics (NASDAQ:CNTX) is already off to the races. The biotech is up 80% so far in 2024 and has more than tripled over the past 12 months. Piper Sandler analyst Joseph Catanzaro initiated coverage of the stock last week with an overweight rating and set a market-high $4.50 per share one-year target price. Context stock currently trades around $2 per share, indicating 125% upside potential.
The analyst highlighted the potential of Context Therapeutics’ lead drug candidate, CTIM-76, which targets Claudin6 (CLDN6) in solid tumors. CLDN6 is one of the 27 family members of claudins that play an important role in tight adherence epithelial cell sheets that plays a significant role in cancer start and progression.
According to Investing.com CTIM-76 shows indications it could be effective against a broad range of CLDN6 expressions. That might let it be an effective therapy against different types of cancer, including ovarian and non-small cell lung cancer. Piper Sandler was bullish about the treatment’s prospects heading into clinical testing.
Of course, Context Therapeutics is a pre-revenue stage company so its stock is going to be volatile but the market is backing this stock today.
Revance Therapeutics (RVNC)
Analyst David Amsellem reiterated his overweight rating of Revance Therapeutics (NASDAQ:RVNC) though he lowered the one-year price target from $20 per share to $11 per share. That is still a 263% implied upside in the stock price.
Unlike Context Therapeutics, Revance does generate revenue from the sale of Daxxify, an alternative to the better known Botox made by AbbVie (NYSE:ABBV). The treatment lasts between six months and nine months whereas Botox averages three to four months.
First-quarter revenue jumped 13% to $51.9 million on higher Daxxify sales, which hit $22 million. Botox generates about $2 billion annually for AbbVie. Revance generated $29 million in sales of its RHA Collection, or Resilient Hyaluronic Acid, the only hyaluronic acid filler approved by the FDA for dynamic facial lines, wrinkles and folds. Daxxify is now also FDA-approved for the treatment of adults with cervical dystonia, a painful condition that causes the neck muscles to contract involuntarily, which causes the head to twist or turn to one side.
However, Revance stock has been on a long slide lower. Shares are down 65% in 2024 and over 90% for the past year. The stock collapsed after Revance posted bigger than expected losses last year and then continued falling after the biotech said it was cutting prices on Daxxify to better compete against Botox. It likely plays into why the Piper Sandler analyst nearly halved his price target.
Design Therapeutics (DSGN)
Design Therapeutics (NASDAQ:DSGN) went the other way when analyst Yasmeen Rahimi doubled her price target from $6 per share to $12 per share. She also upgraded her rating from neutral to overweight. Rahimi says the biotech has a diversified and innovative pipeline that provides a solid foundation for future growth. Trading at around $4.50 per share, the price target implies 167% growth ahead.
The analyst maintains the stock is value-priced yet offers solid financials and sufficient cash on hand to finance its drug development program. She believes the outlook for that program is positive, with promising outcomes for its DT-216P2, DT-168, and the upcoming drug candidates for Huntington’s disease and myotonic dystrophy 1.
DT-216P2 is for the treatment of Friedreich Ataxia, a hereditary disorder that affects some of the body’s nerves. DT-168 is for Fuchs endothelial corneal dystrophy, an eye disease that attacks the endothelial layer of the cornea.
Shares of Design Therapeutics are up 69% in 2024.
On the date of publication, Rich Duprey held a LONG position in ABBV stock. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
