Two rising growth stocks that could rise another 47% to 73% according to Wall Street

By | March 26, 2024

Whether you realize it or not, picking growth stocks that perform well has been much easier than usual for well over a year now. After an increase of 43% in 2023, the Nasdaq Composite The index is still up a healthy 39% over the past twelve months.

Despite such a big run-up for the main market index most associated with growth stocks, investment bank analysts who track the biopharmaceutical industry expect more gains from a few exceptional companies.

Individual investor looking at many stock charts.

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Viking therapies

Shares of Viking therapies (NASDAQ: VKTX) will rise about 275% in 2023, but Wall Street analysts believe the rise is not yet complete. The consensus price target for clinical-stage biotech stocks suggests a 47% gain could be in store.

Shares of Viking Therapeutics shot higher in February after the company announced surprisingly positive results from a Phase 2 trial of an anti-obesity candidate called VK2735. Viking’s candidate is similar to Eli Lilly‘s tirzepatide, the active ingredient in Mounjaro and Zepbound.

Researchers randomized 174 patients to receive a placebo or one of four doses of VK2735. Patients receiving the highest dose achieved an average weight loss of 14.7% after 13 weeks, compared to an average weight loss of 1.7% in the placebo group.

It’s still early, but VK2735’s performance appears competitive with Lilly’s tirzepatide. Wall Street analysts expect sales of tirzepatide to exceed $50 billion annually. If Viking’s candidate continues to produce impressive clinical trial results, a deep-pocketed pharmaceutical giant could be tempted to make a juicy buyout offer that sends the stock even higher.

Before you bet all your chips on Viking Therapeutics, it’s important to realize that it could take more than a year before any approved products are available for purchase. Despite this unattractive timeline, the company’s market cap has risen to $7 billion at recent prices.

Shares of Viking Therapeutics could soar much higher, but any sign of trouble in the upcoming clinical trial readouts could lead to serious losses. If you want to take a chance on this stock, make it a very small part of a diverse portfolio.

Iovance Biotherapeutics

Shares of Iovance Biotherapeutics (NASDAQ: IOVA) have more than tripled in the past six months, but Wall Street expects further gains. The consensus price target for the stock implies an upside of 73% this time next year.

Iovance shares have risen sharply as the Food and Drug Administration (FDA) approved the company’s first cancer therapy in February. Amtagvi is a first-in-class treatment for skin cancer patients, made from immune cells that naturally surround and attack tumors, called tumor-infiltrating lymphocytes.

Amtagvi received accelerated approval for the treatment of advanced melanoma patients who relapsed after treatment with Keytruda or a similar drug. This is a difficult population to treat. However, in 23 of the 73 evaluable patients, the therapy shrank the tumors.

Amtagvi received accelerated approval based on tumor response rates. However, to remain marketable, Iovance must show the FDA that it provides long-term survival benefit. A decent tumor response rate suggests that subsequent trials may demonstrate the necessary benefit, but success is far from guaranteed.

Iovance is also developing a treatment for lung cancer similar to Amtagvi, called LN-145. Like its predecessor, LN-145 is made from a patient’s tumor-infiltrating lymphocytes that have been modified to recognize surface proteins specific to the patient’s tumors.

Iovance has already received accelerated approval for its first drug, but it is arguably riskier than Viking Therapeutics. At recent prices, Iovance has a large market cap of $4.3 billion, even though sales of complex cellular cancer therapies often fall short of pre-launch expectations. It’s probably best to tread lightly on this stock until there are some successful initial launch numbers for the first drug.

Should you invest $1,000 in Viking Therapeutics now?

Consider the following before purchasing shares in Viking Therapeutics:

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Cory Renauer has no position in any of the stocks mentioned. The Motley Fool holds positions in and recommends Iovance Biotherapeutics. The Motley Fool has a disclosure policy.

2 Rising Growth Stocks That Wall Street Says Could Rise Another 47% to 73% Originally published by The Motley Fool

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