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3 Biotech Stocks That Could Make a Big Comeback in 2022

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Following the phenomenal gains of the previous year, biotech companies are expected to grind out small gains in 2022. Throughout 2021, COVID-19 medication and vaccine developers faced uncertainty due to program setbacks and the sudden rise of mutant strains.

The year saw some pivotal authorizations, including Biogen Inc. BIIB -0.68 percent, Alzheimer’s drug Aduhelm, which was approved by the FDA despite controversy. So far in 2021, over 49 new molecular entities have been approved, indicating that healthcare innovation is alive and well.

We looked at three biopharma firms that could see a large return in the coming year in this article. Investment in biopharma stocks is risky, as it always is, and the stock could swing either way in response to make-or-break factors.

1. Albireo Pharma, Inc.

Year-to-date Performance: (-35.4 percent )

Description: A biopharmaceutical business focused on the discovery of innovative bile acid modulators to cure rare pediatric and adult liver disorders.

In 2021, Albireo shares underperformed the overall biotech industry. The sell-side is enthusiastic about the stock’s future performance and fundamentals.

According to TipRanks statistics, the average analyst price goal is $76, and the consensus analyst recommendation is a Strong Buy. This implies a 200 percent increase in value from current levels.

Albireo’s flagship medicine Bylvay, also known as odevixibat, has been authorized in the United States and Europe to treat progressive familial intrahepatic cholestasis or PFIC. Alagille syndrome and biliary atresia are also being studied in late-stage research with Bylvay.

A3907, which is being developed for adult cholestatic liver illnesses such as primary sclerosing cholangitis and primary biliary cholangitis, received positive topline results from a Phase 1 study earlier this month. In 2022, it expects to start a Phase 2 adult liver disease research.

Albireo is also testing A2342 in the treatment of viral cholestatic illness.

Bylvay sales are expected to be $3 million to $4 million in 2021, according to Albireo. The company has $262.6 million in cash and cash equivalents as of September 30. The business believes its financial reserves to be sufficient to fund Bylvay launches and the following stages of the early asset portfolio, according to its third-quarter financial report.

2. ACADIA Pharmaceuticals Inc.

Year-to-date Performance: (-54.6 percent )

A biopharmaceutical company focused on neuroscience at the commercial stage.

The FDA’s denial of ACADIA’s regulatory application to expand the label of its pimavanserin for treating dementia-related psychosis was a major factor in the company’s struggles in 2021. When the business announced the FDA’s communication regarding problems in the application in early March, the price plummeted. When the FDA published a detailed response letter for the application in April, the stock lost even more shine.

Pimavanserin has been licensed for the treatment of hallucinations and delusions associated with Parkinson’s disease psychosis under the brand name Nuplazid.

The business announced on Dec. 20 that it aims to resubmit the pimavanserin supplemental new drug application in the first quarter of 2022, with the suggested indication limited from dementia-related psychosis to Alzheimer’s disease psychosis.

In a late-stage study, pimavanserin is also being tested for negative symptoms of schizophrenia.

Trofinetide, which has been in-licensed from Neuren Pharma and is being tested for Rett syndrome, is another late-stage asset for ACADIA.

ACP-0544 in post-operative pain Phase 2 proof-of-concept data is expected to be reported in the first quarter of 2022, in addition to the pimavanserin sNDA filing.

Acadia had $540.3 million in cash, cash equivalents, and investment securities as of September 30.

3. Rocket Pharmaceuticals Inc.

Year-to-date Performance: (-56.3 percent)

Clinical-stage gene therapy business specializing in rare childhood illnesses.

Rocket Pharma’s stock has a consensus recommendation of Strong Buy, with an average analyst price objective of $76.25.

The company is working on four gene treatments, with RP-L102 and RP-L201 being the most advanced experimental assets. Ex-vivo lentiviral gene therapy candidates for Fanconi anemia and leukocyte adhesion deficiency-1 are being tested in mid-stage trials.

Chardan analyst Geulah Livshits increased the launch probabilities of RP-L102 and RP-L201 from 70% to 80% following presentations on these two assets at the American Society of Hematology.

Two-Phase 1 experimental medicine is also in the pipeline: RP-A501 for Danon disease and RP-L301 for pyruvate kinase deficiency.

In its third-quarter financial release, Rocket Pharma stated that its cash, cash equivalents, and investments of $421.5 million as of Sept. 30 would be sufficient to sustain its operations until the second half of 2023.

The following are the screening criteria that were used:

  • In 2021, it was down by more than 20%.
  • Buy and above is the average consensus rating.
  • Key catalysts on the horizon.
  • A cash runway.

The Author

Oladotun Olayemi

Dotun is a financial enthusiast who specializes in first-in-class financial content, including crypto, blockchain, market, and business, to educate and inform readers.