JP Morgan upgrades two biotech companies amid 'optimistic' outlook

A scientist works at Zai Lab's drug development facility in Shanghai, China.
Adam Jourdan | Reuters

J.P. Morgan alerted clients to two biotech companies that it believes could outperform peers in the next year.

Though bullish biotech as a whole, analysts at the firm announced that they were upgrading a pair of stocks to overweight.

"Overall, we remain optimistic about the outlook for biotech in 2018, despite recent volatility giving back some early outperformance to start the year," wrote analyst Cory Kasimov on Wednesday. "Indeed, the combination of continued innovation, a constructive FDA, and ready access to capital markets, all under the auspices of an omnipresent M&A backdrop, presents a compelling setup."

Here are the two stocks J.P. Morgan upgraded to overweight during the firm's ongoing rating rebalancing.