Analysts see gains of more than 50% in these 2 mid-cap biotech stocks

Biotech Stocks for 2024

Key points

  • Over the past three months, U.S. biotech stocks have risen about 15% and have outperformed the broader healthcare sector.
  • Last week, biopharmaceutical company Madrigal Pharmaceuticals received bullish support from five analysts after posting positive clinical trial results.
  • Given Beam Therapeutics’ pipeline progress and potential to reshape the gene editing landscape, its shares are back on traders’ radar.
  • 5 stocks we like better than Madrigal Pharmaceuticals

2024 is shaping up to be a pivotal year for the biotechnology sector.

In recent years, emergency Covid vaccines have ushered in several groundbreaking innovations that have changed the way drugs are developed and healthcare is administered. Advances in the treatment of cancer, Alzheimer’s disease, and obesity have highlighted steady progress in this field.

This year, biotech companies are expected to build on last year’s discoveries and embrace emerging trends. It is no surprise that artificial intelligence (AI) is poised to play a major role in drug and protein discovery. RNA technologies are expected to become more sophisticated and have a greater impact on cancer and HIV treatment. CRISPR technology that uses specific delivery systems to target various diseases is gaining momentum.

With these and other trends expected to lead to life-changing discoveries, biotech will be an interesting group to watch in 2024. Combined with recent clinical trial successes, growth prospects have made biotech one of the most interesting investments of recent times.

Over the past three months, U.S. biotech stocks have risen about 15% and have outperformed the broader healthcare sector. If the market’s “risk-on” sentiment persists, volatile biotech stocks could continue to generate huge gains.

This month, bullish pipeline news, analyst comments and M&A trades have triggered rallies in several mid-cap biotech names. ImmunityBio and CymaBay Therapeutics are just two examples.

But with these and other stocks trading near highs, companies recovering from 52-week lows could have a more explosive upside. Wall Street sees big comeback gains in these two biotech companies.

Why are analysts bullish on MDGL?

Last week, five Wall Street analysts issued buy ratings on Madrigal Pharmaceuticals, Inc. NASDAQ: MDGL. Their average price target is $332.50, implying a 54% upside from Monday’s close.

The bullish approval came after the biopharmaceutical company released positive Phase 3 study results for its investigational drug resmetirom to treat nonalcoholic steatohepatitis (NASH). Madrigal’s lead candidate met both of the study’s primary endpoints and demonstrated a favorable safety profile. The FDA granted Resmetirom Priority Review and set March 14, 2024 as the target date to complete the review. If approved, it would become the first drug approved for NASH, a disease that affects about 1.5 million patients in the United States.

Madrigal’s potential to improve the lives of Americans with NASH and other liver diseases could not only lead to strong financial results but also make it an attractive acquisition target for a larger biotech company. The stock price rose to $322.67 in May 2023, but has since fallen by over $100.00.

What is the consensus price target on BEAM?

Over the past three months, price targets on Beam Therapeutics Inc. NASDAQ: BEAM they average $55.00. Shares of the precision genetic drug developer rose 15% on Monday, despite no news on the company. Gilead Sciences announced its acquisition of mid-cap biotech CymaBay Therapeutics, sparking speculation that similarly sized Beam Therapeutics could be a target as M&A activity in the sector heats up.

Despite the surge, BEAM is more than 60% away from Wall Street’s consensus price target. Two weeks ago, JP Morgan upgraded Beam Therapeutics from Neutral to Overweight, becoming the fifth consecutive company to say it will buy the stock in 2024.

Earlier this year, the company reported progress in its hematology and genetic disease portfolio, as well as outlined expected milestones for studies related to sickle cell disease (sickle cell disease) and genetic diseases. Initial data from the BEACON study of the investigational cell therapy for SCD BEAM-101 is expected to be published in the second half of 2024. The first clinical study for the genetic disease candidate BEAM-302 could begin as early as the first half of 2024.

Given Beam Therapeutics’ pipeline advancement and potential to reshape the gene editing landscape, its shares are back on traders’ radars after dropping as low as $16.95 in October 2023. BEAM also attracts a lot of attention because is one of the top 20 holdings of a popular ARK Innovation ETF (ARKK) portfolio by Cathie Wood. ARKK contains several other promising biotech names, including CRISPR Therapeutics and Intellia Therapeutics.

Before you consider Madrigal Pharmaceuticals, you’ll want to hear this.

MarketBeat tracks daily Wall Street’s highest-rated and best-performing research analysts and the stocks they recommend to their clients. MarketBeat identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market takes hold… and Madrigal Pharmaceuticals wasn’t on the list.

While Madrigal Pharmaceuticals currently has a “Moderate Buy” rating among analysts, top-rated analysts believe these five stocks are better buys.

View the five stocks here

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