Wall Street analysts are bullish on many biotech stocks in the new year. In this Motley Fool Live video recorded on Jan. 5, Motley Fool contributors Keith Speights and Brian Orelli discuss three of them that analysts think could soar 50% or more in 2022.
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Keith Speights: Wall Street analysts are projecting that quite a few biotech stocks could soar 50 percent or more in 2022. I'll mention a few of them just to see if you agree with Wall Street analysts or not. Okay, let me start off with CRISPR Therapeutics (CRSP 3.03%). CRSP is the ticker there.
Brian Orelli: Yeah, I mean, it's certainly been higher than 50 percent higher over the last year. But I think a lot of that was sort of the mania of CRISPR stocks in general. Then there was a lot of money flowing into the ARK ETF, and it had to go somewhere. I think that fueled the mania.
I don't think we're going to get any data in 2022 that will convince people that CTX001 is looking better than it already is. I think it's basically curing every patient that it's got. Getting more patients, I'm not sure it's going to convince investors that it's worth more.
I think they're pretty convinced and there's probably more downside risks that some patient doesn't actually respond than there upside benefit of more patients responding. Maybe we get some cancer data from its CAR-T programs, that could potentially increase its evaluation.
Then it's starting a clinical trial with via site for cell therapy for type 1 diabetes. I don't know if we're going to get data from that clinical trial that just started either right at the end of the year or in the last week. But I think if we got some data there, proof-of-concept data, maybe that could be another potential boost for the stock.
Speights: Analysts also think Exelixis (EXEL 2.24%) could jump 50 percent or more. What do you think?
Orelli: Yeah, Exelixis is a really weird company because it has Cabometyx that's approved for a couple of different types of cancer, and it's trying to increase its sales. That will obviously increase its valuation. Then it's got a whole bunch of early stage pipeline candidates, they are all in Phase I or pre-clinical.
You know early stage pipelines are really hard to value. Maybe some solid Phase I data from one or more of them could move the needle because there's probably not much valuation factored in right now. If they do get data then that could increase the valuation. But I think most of the value right now is Cabometyx.
The big growth came from the approval of Cabometyx with the Bristol Myers Squibb's Opdivo in combination. That happened in January of 2021. All the easy year-over-year comparisons are now done if for 2022.
That leaves further expansion of Carbometrics through new clinical trial data. We'll get some data for a clinical trial for Carbo plus Opdivo plus Bristol-Myers Squibb's Yervoy in renal cell cancer that's expected this year. There's a lot of potential to increase 50 percent, but it's based on clinical trial data, which is probably going to be hard to predict.
Speights: Finally, what about Ionis Pharmaceuticals (IONS 3.47%)?
Orelli: I hope so [laughs] because one, it's down a lot, and two, I own it. The company has been knocked down quite a bit by some late-stage failures and ALS and Huntington's disease. I think there's some hope that the drugs could be approved despite the disappointing data. I think that's a pretty low chance, but I've heard it out there. But certainly if it happened, that would increase the valuation substantially probably more than 50 percent.
They are expecting Phase III data for a drug for TTR amyloidosis, the neuropathy version of that. I'm not sure the positive data is going to get a 50 percent bump. But they also have 11 drugs in Phase II. I don't know the exact timelines better. Presumably, some of those are going to read out in 2022. Maybe a few hits there. Plus positive Phase III data for the TTR amyloidosis drug that maybe could get it to a 50 percent bump even without the ALS or Huntington's disease surprise approvals.