The biotech sector is in the spotlight in 2024, where under-the-radar biotech stocks with upcoming catalysts could offer significant upside. Analysts are projecting an acceleration in new drug approvals as demand for effective treatments for chronic diseases continues to increase. Biotech companies developing therapeutics in gene therapy, obesity, oncology, and immunology are attracting significant investor attention as potential growth drivers.
Yet, the iShares Biotechnology ETF (NASDAQ:IBB) has underperformed the S&P 500 index, gaining less than 3% compared to the broader market’s 24% rally. Despite lackluster performance last year, the influx of capital from big pharma via mergers and acquisitions has bolstered market sentiment. Cash-rich pharmaceutical giants are increasingly seeking to bolster their pipelines and diversify revenue streams by acquiring companies with promising drug candidates. With that information, here are the three under-the-radar biotech stocks with upcoming catalysts in 2024 that can generate significant returns.
Axsome Therapeutics (AXSM)
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The first name among our biotech stocks, Axsome Therapeutics (NASDAQ:AXSM), develops novel therapies for central nervous system conditions with limited treatment options. Management recently announced fourth quarter and full year financial results. Net product revenue surged 193% YOY to $71.5 million, while the company narrowed its adjusted loss per share to 73 cents from $1.28 year-over-year (YOY).
Analysts highlight a strong preference for prescribing Auvelity for major depressive disorder (MDD) over rival treatments due to its efficacy and ease of use. In the fourth quarter, Auvelity generated $49.0 million in sales, while Sunosi, a treatment for wakefulness for excessive daytime sleepiness (EDS), contributed $22.5 million to product revenue.
Meanwhile, the biotech company boasts an impressive neuroscience portfolio that includes five late-stage drug candidates for ten psychiatric and neurologic conditions. For instance, AXS-05 is a promising candidate that targets Alzheimer’s disease agitation and smoking cessation. AXS-07 is developed for acute treatment of migraine, while AXS-14 addresses management of fibromyalgia. The company recently advanced Phase 3 trials of AXS-05 in Alzheimer’s disease agitation and AXS-12 in narcolepsy.
AXSM stock is currently flat year-to-date (YTD), but the 12-month median price forecast for IOVA is $117.5 suggesting an attractive 50% upside potential from current levels.
Immunovant (IMVT)
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Next up on our list of biotech stocks is Immunovant (NASDAQ:IMVT), which develops innovative monoclonal antibodies targeting autoimmune diseases. Its lead drug candidate, Batoclimab, holds blockbuster potential, targeting diverse indications, including thyroid eye disease among others.
In mid-February, Immunovant released third-quarter financial results. Net loss was $51.4 million, an improvement compared to the prior year’s $63.2 million. Cash and equivalents ended the quarter at $691 million.
Analysts highlight that Batoclimab holds particular promise, currently undergoing two Phase 3 studies for both thyroid eye disease and myasthenia gravis. The drug is expected to steal significant market share from the current standard of care Tepezza, which generated sales of nearly $2 billion in 2022.
Immunovant is actively advancing IMVT-1402, a next-generation therapy that decreases the immunoglobulin G antibody, through multiple clinical trials. This strategic move underscores the drug’s potential to treat a broad spectrum of immunological diseases, constituting another significant tailwind.
IMVT stock has dropped almost 11% YTD. Still, a pullback towards low $30 to initiate positions might be prudent, as positive catalysts might already be priced in. The stock presents a 40% upside potential, based on average analysts’ price target of $51. If you are looking for some, under-the-radar biotech stocks this is a great starting point.
Iovance Biotherapeutics (IOVA)
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Finally, we introduce Iovance Biotherapeutics (NASDAQ:IOVA) focused on developing and delivering T-cell therapies for patients with solid tumor cancers. The biotech company has recently received accelerated FDA approval for its T-cell immunotherapy Amtagvi in the treatment of advanced melanoma.
Amtagvi is the first and only individualized T-cell therapy to win FDA approval for the treatment of solid tumor cancers. The treatment is expected to start generate substantial revenue in 2024, with Phase 3 confirmatory data eagerly awaited by investors. Full approval is expected to solidify Amtagvi’s market penetration, driving broader utilization and adoption. Analytics company GlobalData forecast projects Amtagvi to reach annual global sales of $846 million by 2029, with blockbuster potential by 2030.
IOVA stock has surged more than 400% since its 52-week low in October 2023 and has almost doubled YTD. The average analysts’ price target of IOVA shares is $24.50, signaling roughly 55% upside.
On the date of publication, Tezcan Gecgil did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines
Tezcan Gecgil, PhD, began contributing to InvestorPlace in 2018. She brings over 20 years of experience in the U.S. and U.K. and has also completed all 3 levels of the Chartered Market Technician (CMT) examination. Publicly, she has contributed to investing.com and the U.K. website of The Motley Fool.
