Bank of America reveals its 4 top biotech picks for 2024 — and gives one 166% upside

Published Mon, Dec 18 20236:49 PM ESTUpdated Tue, Dec 19 202310:02 PM EST

Bank of America has named four small and medium-sized pharmaceutical stocks as its "top picks" for 2024, highlighting their strong potential for regulatory approvals and product launches over the next year. The Wall Street bank noted it remains "cautiously selective" in its biotech picks as the sector as a whole has underperformed the broader stock market in 2023. "While we still think there is room for innovation and new ventures in the biotech space, we think companies with defined derisking events even in early-stage companies or companies with unique technology catalysts are likely to outperform," Bank of America analysts Greg Harrison and Mary Kate Davis said in a note to clients on Dec. 15. The four stocks are BridgeBio Pharma , Rocket Pharmaceuticals , Liquidia Corp and Travere Therapeutics . Important catalysts are expected for the above companies in 2024, such as late-stage drug trial results, regulatory decisions and potential new product launches. Travere Therapeutics Bank of America analysts believe Travere Therapeutics could see increased adoption of its newly approved Filspari treatment for the chronic kidney condition IgA nephropathy (IgAN) if it gets expanded full U.S. approval in 2024. IgAN is a rare kidney disease affecting up to 150,000 people in the United States, according to the company. Travere also has late-stage trial results coming up in 2024 for an experimental treatment called "pegtibatinase." According to the company, it is expected to treat a rare metabolic disorder that can lead to "vision, skeletal, circulatory and central nervous system issues". The Wall Street bank expects those catalysts to drive up the stock 166% over the next 12 months to $23 a share. Liquidia Technologies The investment bank's analysts noted that Liquidia Technologies is preparing to launch its Yutrepia inhalation powder to treat pulmonary arterial hypertension (PAH) after resolving an ongoing legal dispute. PAH is a "rare, chronic, progressive disease caused by hardening and narrowing of the pulmonary arteries that can lead to right heart failure and eventually death," according to the company . Bank of America sees peak sales for Yutrepia reaching $562 million per year, as there are an estimated 30,000 patients in the United States. Their $13 share price target points to a 75% upside potential. Rocket Pharmaceuticals BofA analysts said Rocket Pharmaceuticals' gene therapy program for Leukocyte Adhesion Deficiency-I (LAD-I) was on track for potential U.S. approval by a March 31 deadline. LAD-I is a rare pediatric disease caused by a gene mutation that hinders the body's ability to combat infections, according to the company . BofA expects shares to rise 30% to $37 over the next 12 months. BridgeBio BofA's analysts believe BridgeBio's "acoramidis" drug could get regulatory approval in 2024 to treat the heart condition transthyretin amyloid cardiomyopathy . They predict a peak annual sales potential of $4.4 billion for the drug. "Overall we think BridgeBio has an impressive and broad product portfolio which has important updates on deck putting the company on deck for a catalyst rich 2024," the BofA analysts said. Their $50 per share price target on BridgeBio implies 27% upside from current levels. — CNBC's Michael Bloom contributed reporting.