Despite the stock market undergoing its biggest correction in more than a year, investors have enjoyed a historic bounce from the March 2020 pandemic lows. It took less than 17 months for the broad-based S&P 500 to double in value. By comparison, the benchmark index has returned closer to 11% annually, including dividends, since 1980.
But even with these big gains for the broader market, some stocks may just be getting started. Based on the highest price target issued by Wall Street analysts and investment banks, the following four under-the-radar stocks have the potential to skyrocket between 319% and 645% in 2022.
Ocugen: Implied upside of 408%
The first stock with significant upside potential, at least according to one analyst, is clinical-stage biotech stock Ocugen (OCGN -1.65%). According to Robert LeBoyer of Noble Financial, Ocugen can hit $15 a share, which would represent a more-than-quintupling in the company's share price, based on where it closed on Jan. 27.
Ocugen's potential claim to fame and riches is its coronavirus disease 2019 (COVID-19) vaccine, Covaxin. Covaxin was developed by India's Bharat Biotech, and it yielded a respectable 78% vaccine efficacy (VE) in a 25,800-patient clinical study. Covaxin was also given the green light for emergency use by the World Health Organization (WHO) in early November. With so many people left to vaccinate globally, there's ample room for multiple vaccines to thrive.
But there's a very big catch to Ocugen's future. The company signed a commercialization agreement with Bharat Biotech that only covers the U.S. and Canada. This means the WHO giving Covaxin a green light won't put a dime in Ocugen's pockets. Although the U.S. and Canada are highly lucrative markets for pharmaceuticals, there are already a number of well-established COVID-19 players in the U.S. and Canada. It's not clear if a vaccine offering a 78% VE will even be necessary.
Unless Ocugen can garner emergency use authorization in these two markets, it likely has no chance of coming anywhere close to LeBoyer's price target.
Vaxart: Implied upside of 319%
Another under-the-radar stock that could fly in 2022, assuming Wall Street is correct, is clinical-stage drug developer Vaxart (VXRT 2.22%). Analyst Yasmeen Rahimi of Piper Sandler expects Vaxart to hit $18 a share, which would represent a hearty 319% upside from where it closed a few days earlier.
Vaxart has two core catalysts that essentially blend into one. First, it has its proprietary technology known as "Vector-Adjuvant-Antigen Standardized Technology," or VAAST. Whereas most vaccine-based medicines provide a clear systemic response, Vaxart is attempting to lean on VAAST to create oral treatments that elicit systemic and mucosal immunity. In other words, its therapies would offer potentially greater protection against airborne viruses.
The second catalyst is the development of an oral COVID-19 treatment. Last year, Vaxart's early stage data from its oral COVID-19 therapy showed mixed results. While it did produce a notable immune response, the level of neutralizing antibodies was considerably lower in pill form relative to traditional vaccines.
Vaxart's plan of attack, so to speak, is to target a specific protein with its mid-stage trial. Though an oral COVID-19 treatment would be a game-changer from a distribution perspective, we still look to be a ways off from having anything definitive hitting pharmacy shelves.
Intercept Pharmaceuticals: Implied upside of 468%
Interestingly, Vaxart isn't the only biotech stock that Rahimi sees skyrocketing in 2022. The Piper Sandler analyst also has an $82 price target on liver disease-focused drug developer Intercept Pharmaceuticals (ICPT). If Intercept were to reach $82 this year, it'd mark a 468% increase from where it is now.
The single biggest catalyst that makes or breaks Rahimi's case is obeticholic acid (OCA), a late-stage treatment for nonalcoholic steatohepatitis (NASH). NASH is a liver disease that affects between 2% and 5% of all U.S. adults, and is characterized by liver fibrosis that can lead to cancer and even death. There is no cure for NASH, but it's a $35 billion untapped opportunity for drugmakers.
Nearly three years ago, Intercept reported data from its late-stage Regenerate trial, which examined OCA in patients with NASH. While the study did reach one of its two co-primary endpoints -- a statistically significant reduction in liver fibrosis without a worsening in NASH -- the patients in the highest-dose arm (the most-effective group) showed a big uptick in pruritus (itching) and trial discontinuations, relative to the placebo arm. The U.S. Food and Drug Administration (FDA) chose to issue a Complete Response Letter to Intercept demanding additional trial and safety data on OCA.
Sometime within the next two months, Intercept is expected to release data from its phase 3 Reverse study in patients with compensated cirrhosis due to NASH. The data from this study should allow Intercept to resubmit its new drug application with the FDA. Even if OCA is only approved for a small subset of patients, it could offer billion-dollar sales potential. But reaching $82 this year might be asking a bit much.
Bionano Genomics: Implied upside of 645%
But the mountain of upside opportunity, at least pertaining to this list of under-the-radar stocks, belongs to genome-analysis company Bionano Genomics (BNGO -7.27%). According to analyst Kevin DeGeeter of Oppenheimer, Bionano could rally to $14, which implies upside of 645%!
The excitement surrounding Bionano Genomics started a little over a year ago when the company issued numerous press releases and studies showcasing its optical genome mapping (OGM) system known as Saphyr. For instance, one study, released in December 2020, showed Saphyr had better success in identifying large structural genome variations than a similar OGM system developed by Pacific Biosciences. In addition to being more effective, it was the cheaper of the two, as well.
What Saphyr brings to the table is a potentially licensable technology that drug developers could use to better target gene variations of hard-to-treat diseases. Assuming Bionano can generate some licensing revenue, this incoming capital, along with dilutive share sales, should provide enough cash for the company to build up its use case for Saphyr.
On the other hand, it could be years before Saphyr gets a green light from the FDA. Without this proverbial green light, it could be difficult for Bionano Genomics to secure research/license agreements that generate revenue.
Having fallen well off its highs, Bionano is intriguing for long-term investors with a high tolerance for risk and reward. But reaching $14 in 2022 is not something I'd expect without FDA approval.