Top Biotech Stock Favorites to Buy With Up to 100% Upside Potential

Health and Healthcare

Published: January 4, 2016 10:05 am

Last Updated: January 13, 2020 3:29 pm

While aggressive investors love biotechnology, and the returns over the years for the top stocks have been outstanding, 2016 could be a wild-card, as the election cycle is going to keep drug pricing and health care costs front and center. Politicians looking for votes like nothing better than to find a scapegoat for bellicose populist rhetoric.

The analysts at the specialty biotech and health care boutique firm Leerink are out with a sentiment right in line with many, that 2016 could be a year with some uncertainty.

They also acknowledge that while multiples for the health care sector are near the high end of the historical price-to-earnings range, the potential returns for investors remain compelling when matched with other sectors for 2016.

Leerink named their favorite picks for 2016, including eight biotech companies. We screened for the four that could have the largest upside potential. All are rated Outperform at Leerink.

Adaptimmune Therapeutics

This small cap name could have big upside for aggressive investors. Adaptimmune Therapeutics PLC (NASDAQ: ADAP) is a clinical stage biopharmaceutical company focused on novel cancer immunotherapy products based on its T-cell receptor (TCR) platform. The company aims to utilize the body’s own machinery, the T-cell, to target and destroy cancer cells by using engineered, increased affinity TCRs as a means of strengthening natural patient T-cell responses.

Adaptimmune’s lead program is an affinity enhanced T-cell therapy targeting the NY-ESO cancer antigen. Its NY-ESO TCR affinity enhanced T-cell therapy has demonstrated signs of efficacy and tolerability in Phase 1/2 trials in solid tumors and in hematologic cancer types, including synovial sarcoma and multiple myeloma.

Leerink analysts feel that the company may have the best in-class platform enabling generation of genetically engineered human TCR-based adoptive cell therapies. They also feel that its products could be very useful in addressing solid tumor indications, an area that has been challenging for CAR-T; yet shares trade at a discount to the peer group. With updates from five Phase 1 and 2 clinicals expected in the second half of 2016, more validation for the technology could be a solid catalyst.

The Leerink price target for the stock is $24, and the Thomson/First Call consensus price target is $20.50. Shares closed most recently at $12.06.