As biopharma investors follow the latest buzz around advancements in clinical research, they may be under-appreciating opportunities in neurology, psychiatry and genetic medicine, according to a report from Oppenheimer. Specifically, analyst Jay Olson called out companies such as Biogen , Karuna Therapeutics and Crispr Therapeutics , among others. "Our analysis shows Genetic Medicine and Metabolic (including Type-2 Diabetes and Obesity products) outperformed by > 20% on average over the ~5.5-year period, and these 2 categories are also leading outperformance in 2023YTD," Olson wrote. "Valuation multiples across disease areas show CNS [ or central nervous system] and Genetic Medicine at relative low points." For years, biopharma investors put a lot of focus on companies that were involved in oncology and immunology research. And rightly so, Olson said, explaining that there was a huge need for better treatments and the science was advancing. Though now, the dynamics are changing, he said. Growth rates in oncology and immunology are slowing and provisions of the Inflation Reduction Act threaten to put pressure on pricing, Olson said. Meanwhile, a lot of attention has shifted toward metabolic research due to the news around obesity treatments, including Novo Nordisk's Wegovy and Eli Lilly's Mounjaro. Forecasts predict huge jumps in company sales due to these products, but investors have already flooded into these names. Novo Nordisk's shares up 25% and Lilly's have gained nearly 19% year to date, through Monday's close. "We believe that historical performance and prevailing aggregate market caps reflect sales growth expectations, such as Metabolic representing the largest category with sales expected to grow from $65.5B in 2023E to ~$118B to 2028E for an average growth rate of 14%," he said. However, Olson expects there to be a further acceleration of sales in both CNS and genetic medicine. Among the examples he cited was Biogen. The stock has gained more than 12% year to date, but it has potential upside of as much as 15%, according to Olson. There are two key catalysts for the stock. In July, the Food and Drug Administration could grant full approval to Leqembi , its Alzheimer's Disease treatment. That could then prompt the Centers for Medicare and Medicaid Services to agree to reimburse patients for the treatment, which could cost Medicare as much as $5 billion per year, a recent study published in JAMA Internal Medicine found . Sometime in the second half of this year, Vertex Pharmaceuticals and Crispr could get FDA approval for a gene therapy, exagamglogene autotemcel (or exa-cel), for sickle cell disease and transfusion-dependent beta thalassemia. As a very new area of medicine, gene therapy has greatest potential to accelerate sales growth as treatments come to market. Based on consensus estimates, sales could rise 97% from 2023 to 2028, Olson said. As for Karuna, the company reported in March that its adult schizophrenia treatment, KarXT, met all of its study's primary endpoints in a phase III trial. It expects to submit its new drug application for the treatment by the middle of this year. Analysts have said that KarXT could become a multibillion dollar drug as it could become the "go-to" product for patients who have schizophrenia that hasn't responded to existing treatments. The drug also has potential as a treatment for other conditions. Also in the psychiatry area, there is a lot of attention being paid to zuranolone, a treatment for major depression and postpartum depression, from Biogen and Sage Therapeutics . The FDA granted a priority review of the drug's application in February. Olson also analyzed the multiples of various disease areas by looking at aggregate valuation multiples by market cap versus the five-year sales projections from 2018 to 2023 year to date. "We found Oncology multiples have declined from historically higher levels, while Metabolic has steadily increased in recent years," he wrote. He described immunology multiples as "generally stable" and genetic medicine multiples as highly volatile. "We believe that lower CNS multiples in recent years despite higher forecasted sales represent a potentially attractive disease area for investment," he said.