Growth stocks had an exceptionally rough 2022. Supply chain woes, sky-high inflation, rising interest rates, and the conflict in Ukraine all conspired last year to spur a major correction across the growth equity landscape. 

Despite this less-than-favorable financial environment, however, many developmental companies still made significant pipeline and portfolio advancements in 2022. In turn, Wall Street analysts think there are some tremendous bargains within this space right now. 

A reseacher cutting a DNA molecule in a lab.

Image source: Getty Images.

Which growth stocks might be able to close this latent valuation gap relatively soon? Wall Street analysts think PDS Biotechnology (PDSB -3.65%), Intellia Therapeutics (NTLA -4.85%), and Verve Therapeutics (VERV -1.67%) all have the potential to more than double in value over the next 12 months. Read on to find out more about these three potentially undervalued healthcare stocks.  

PDS Biotechnology

PDS Biotechnology is a clinical-stage company developing novel immune-boosting therapies for cancer and infectious diseases. The biotech's main value driver, at least in the short term, is its lead product candidate, PDS0101. PDS0101 is a human papilloma virus (HPV)-targeted immunotherapy that stimulates a targeted T-cell attack against HPV-positive cancers, according to the company's investor presentation. The therapy is presently in four phase 2 trials as a potential treatment for various HPV-positive cancers.

Wall Street's attention is keenly focused on PDS0101's upcoming registrational trial for recurrent or metastatic HPV16-positive head and neck cancer. If the company gets the green light from regulators at the Food and Drug Administration (FDA), it plans to launch a pivotal trial evaluating PDS0101 in combination with Merck's Keytruda in this high-value indication later this year. This lead indication represents an approximately $2.6 billion commercial opportunity.    

Wall Street's average price target on this small-cap biotech stock implies an upside potential of 119% from current levels. That's not an unreasonable outlook given the company's market cap of $249 million. PDS0101, after all, could one day generate close to $1 billion in annual sales as a treatment for HPV-positive cancers. The catch is that PDS isn't in the strongest financial position with only $71.6 million in cash at last count.   

Intellia Therapeutics

Intellia Therapeutics is a genetic medicine company developing CRISPR/Cas9-based therapies. Despite making significant pipeline progress with its experimental transthyretin amyloidosis candidate, NTLA-2001, and its hereditary angioedema candidate, NTLA-2002, in 2022, the biotech's shares fell by an unsightly 70% last year.

Investors, in short, were in no mood to own shares of cutting-edge biotech companies like Intellia in 2022. This unwarranted sell-off, though, may represent a tremendous buying opportunity for savvy investors. 

What's the investing thesis? NTLA-2001 is widely regarded by analysts and industry insiders as a potential blockbuster product. Wall Street analysts, in turn, think this genetic medicine stock could deliver gains in excess of 145% over the next 12 months. 

That being said, Intellia's bull thesis will likely depend heavily on investor sentiment this year. The biotech, after all, doesn't seem to sport an obvious catalyst that could propel its shares higher in 2023.  

Verve Therapeutics

Verve Therapeutics is another genetic medicine company. The company uses an approach known as "base editing" to make highly precise alterations to the genetic code. Verve currently has its sights set on developing a pipeline of base-editing medicines for cardiovascular disease. The biotech's technology is licensed from fellow base-editing pioneer Beam Therapeutics

At the forefront of this effort is VERVE-101. VERVE-101 is a single-course gene editing medicine indicated for patients with a life-threatening form of atherosclerotic cardiovascular disease known as heterozygous familial hypercholesterolemia. The base editor is presently in an early-stage trial for this indication, with patients being enrolled in both the U.K. and New Zealand. The FDA, however, placed a clinical hold on VERVE-101's Investigational New Drug application late last year. 

What's the key takeaway? Although the FDA is taking a cautious approach with base editors right now, the promise of this technology is undeniable. The stock's bulls on Wall Street, in fact, think it can double in value from current levels over the next 12 months. Longer-term, Verve's stock may prove to be a bona fide wealth escalator, given that the company's technology may deliver functional cures for a range of cardiovasular-related diseases.