Scotiabank has highlighted three biotechnology companies as its “top picks,” each with the potential to more than double in stock price over the next 12 months. The bank’s optimism for these companies and the broader biotechnology sector is partly based on anticipated changes in the macroeconomic environment. Greg Harrison, equity analyst at Scotiabank, said “macro monetary policy pivot to rate cuts is a notable tailwind that will likely reignite wider investment interest in the sector” in a note to clients on Oct. 15. “The Biotechnology sector is firing on all cylinders, with strong execution leading to numerous products in development poised to redefine standard of care across a wide range of disease indications, and we think valuations position the sector for substantial upside.” Out of the 15 stocks that Scotiabank initiated research on, Rocket Pharmaceuticals , Liquidia Corp and Ocular Therapeutix are the three companies that were singled out as top picks. Investors should note that biotechnology investments carry inherent risks, including regulatory hurdles and clinical trial outcomes. Rocket Pharmaceuticals Scotiabank sees Rocket as uniquely positioned to enter the commercial stage of medical treatment development, with two potential gene therapies on the horizon. “We expect Kresladi and RP-L102 to launch in 2025, and, given the unmet need and lack of competition in LAD-1 and Fanconi anemia, we see few barriers to entry for both gene therapies,” Harrison noted. Leukocyte adhesion deficiency (LAD-1) is a rare immunodeficiency disorder. The investment bank expects shares to rise to $50 over the next 12 months, or 165% from the current share price. RCKT 1Y line Liquidia Corp Scotiabank is optimistic about the company’s Yutrepia treatment for pulmonary arterial hypertension, set to launch in May 2025. Despite entering a competitive market, the bank believes, Yutrepia could differentiate itself on superior treatment results. “We see significant opportunity in pulmonary hypertension (PH) associated with interstitial lung disease … a new and growing market, where we estimate Yutrepia could generate [greater than] $1 billion in sales with a conservative patient penetration,” Harrison said. Scotiabank expects shares to rise by nearly 170% to $30 a share over the next 12 months. LQDA 1Y line Ocular Therapeutix The bank sees Ocular’s Axpaxli treatment for wet age-related macular degeneration (wAMD) as a potential gamechanger. wAMD is a common condition that affects vision — making reading and recognizing faces difficult — for people in their 50s and 60s, according to the U.K.’s National Health Service. “Long-acting implants are set to revolutionize the wAMD treatment landscape in the coming years, and we view Ocular’s Axpaxli as differentiated on efficacy and treatment durability based on previous clinical data,” The Scotiabank analyst said in the note to clients. Harrison estimates that even modest market penetration could yield annual sales exceeding $1 billion. Ocular Therapeutix is expected to nearly double to $22 from its current share price of $11.33 over the next 12 months. OCUL 1Y line
