Stocks had a very mixed week. The Federal Reserve’s desire to raise interest rates was delivered a serious blow by an incredibly weak payrolls report for May and a downward revision for April. Still, not everyone is concerned about rising rates and the timing of rate hikes.

One sector that may be partially immune to rising rates is the speculative biotech and emerging pharma space.

24/7 Wall St. reviews dozens of analyst research reports each day of the week. Our goal is to find new investing and trading ideas for our readers. When the week is over, it turns out there are almost always some very speculative outlier calls with upside of 50%, 100% or even exponential upside.

Many speculative calls are made in the biotech and biohealth industries. It is here that fortunes can easily be made.

The dark side is that these speculative companies quite frequently fail to live up to their hype. In fact, some of them absolutely implode and generate an entire loss for speculators.

Two such analyst calls stood out for potentially exponential upside in the week of June 3. Just remember: there is no assurance these companies will succeed.

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Cardiome Pharma

On June 1, Cardiome Pharma Corp. (NASDAQ: CRME) was started with a Buy rating at H.C. Wainwright. It was assigned a $9.50 price target, more than 100% higher than the prior $4.68 closing price. This tiny Canadian outfit targets heart disease, and it operates internationally in harder to penetrate markets.

H.C. Wainwright sees management expanding into other geographies outside of the United States. The firm now sees Cardiome’s revenue growing from $27 million this year to over $170 million by 2025.

All in all, the firm believes that Cardiome could become a top partner for companies that want to sell into countries in which it is harder to operate. The firm’s valuation was as follows:

We derived our price target based on the average of two valuation methods:1) price-sales multiple analysis applying a 4x multiple to our 2025 risk-adjusted revenue estimate of $172M discounted at 12%; and 2) price-earnings multiple analysis applying a 18x multiple to our 2025 estimated earnings of $1.41 discounted at 12%.

Cardiome shares rose to $4.83 on this initiation day, and they were up almost 5% more and above $5 the following day. The shares ended the week at $5.11, after a five-cent gain on Friday.

This stock is very thinly traded (averaging 50,000 shares per day) and the market cap is $104 million. The shares have a 52-week trading range of $3.70 to $10.40. Note that Brean Capital reiterated its Buy rating in May after earnings, also calling for massive upside.

Dimension Therapeutics

More than one key call was made on Dimension Therapeutics Inc. (NASDAQ: DMTX) this past week. It was started as Buy with a $12 price target at Jefferies on June 2. That call was versus a prior $8.09 close.

The firm cited strength in the expertise in AAV providing some competitive advantage in an increasingly crowded gene therapy space focusing on liver diseases.

The stock was later started with a Buy rating and reportedly assigned a $32 price target at Cantor Fitzgerald late on June 2. The prior close was $8.45, implying exponential upside. 24/7 Wall St. did not receive details of this call from Cantor Fitzgerald.

Also in May, Wells Fargo reiterated its Outperform rating and the firm’s valuation range was up at $20.00 to $26.00. The firm said at that time:

We arrive at our valuation range through a sum-of-the parts, probability adjusted net present value for DTX101 and DTX201 for DTX201 in hemophilia A and DTX101 in hemophilia B, with a 30% to 40% probability of success for each, and with a 10% discount rate.

Risks include failure to advance gene therapy clinical candidates into clinical development for hemophila A/B or OTC, failure to achieve adequate transfection rates in the liver, failure to replicate pre-clinical results in humans, failure to gain agreement with FDA on adequacy of human benefit, unanticipated toxicity concerns and failure to gain reimbursement for its gene therapies.

Back in May, Canaccord Genuity reiterated its Buy rating and $20 price target. The firm said:

We reiterate a BUY rating and $20 price target for DMTX based on a sum-of-the-parts probability-adjusted net present value model with a 20% discount rate based on market sentiment within the sector.

We continue to expect positive initial data for DMTX-101 during the second half of 2016.

This stock has a 52-week range of $5.39 to $15.55, and the market cap is $212 million. The cash balance at the end of March was $117 million, with a net tangible asset level of $96.6 million.

Shares closed up four cents at $8.49 on Friday, and trading volume is thin with an average of 52,000 shares per day.

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