Liquidia, Cardiol Therapeutics, Bristol-Myers Squibb, Pfizer - Analysts comment on their favorites

Liquidia, Travere & Co. - These are Bank of America's biotech favorites

The analysts at Bank of America identified four top picks from the second tier that could outperform the broad market in the coming year. Parameters such as a robust data situation, short-term catalysts, corresponding development phases and a positive regulatory outlook were taken into account. BridgeBio, Rocket, Liquidia and Travere are the companies that, according to experts, stand out, particularly in the final phase of approval and in the development of new products.

Bank of America experts expect BridgeBio to receive approval soon for Acoramidis, which is considered an important advance in the treatment of a rare and deadly disease that can cause heart failure. At Liquidia, they see the imminent launch of Yutrepia as positive, although there is currently a legal dispute over approval. In the middle of the month, the Company lost an appeal for approval of Yutrepia, which means that approval could take a long time.

Rocket Pharmaceuticals, on the other hand, is close to the first commercial approval of a gene therapy called RP-L201 for severe LAD-I, a rare genetic immune disorder that makes patients particularly susceptible to recurrent and fatal infections. The biotechnology company Travere, which specializes in CNS disorders, expects full approval of its drug Filspari, assuming the US Food and Drug Administration (FDA) grants approval.

Cardiol Therapeutics - Experts see 600% opportunity

If the analysts at Canaccord Genuity have their way, Cardiol Therapeutics shares should be among the stock market stars in the coming year. With a price target of USD 6.00, the Canadian analyst firm sees a price potential of well over 600% compared to the current share price, which is quoted at USD 0.85. One advantage that the experts emphasize compared to other biotech companies is the high cash position of over USD 30 million, which will enable the Company to press ahead with the development of the various studies until 2026 without further capital measures. In comparison, the stock market value is just USD 55.12 million.

Speaking of studies and clinical programs, according to the management of the clinical-stage bioscience company, which is dedicated to the research and clinical development of anti-inflammatory and anti-fibrotic therapeutics for the treatment of heart disease, these are progressing faster than initially planned. In November, Cardiol Therapeutics announced the recruitment of more than 50% of the 25 patients required for the Phase II MAvERIC-Pilot study for the treatment of recurrent pericarditis. The study, which is expected to be completed in the first quarter of 2024, will be conducted by eight different research centres in the USA that specialize in the treatment of recurrent pericarditis.

Also on board is the world-renowned Massachusetts General Hospital, Harvard Medical School's largest teaching hospital, which, according to Dr. Andrew Hamer, Chief Medical Officer and Head of Research and Development at Cardiol Therapeutics, also has the largest hospital-based research program in the country.

In addition, the Company's drug candidate, CardiolRx™, is currently undergoing the Phase II ARCHER trial for acute myocarditis, which is testing not only safety and tolerability but also the impact on myocardial recovery. According to the experienced management team led by CEO David Elsley, this trial should be completed in the coming financial year.

Given the high cash position and the advanced stages of the two programs, Cardiol Therapeutics' shares could be poised for a significant surge. Additionally, the Canadian company is likely becoming increasingly attractive for acquisition by a pharmaceutical giant.

Bristol-Myers Squibb with billion-dollar deal

Shortly before Christmas, the pharmaceutical giant from New York City put a present under the tree for itself and announced the acquisition of the biotech company Karuna for EUR 12.8 billion. With this move, the Group intends to strengthen its portfolio in the field of neuroscience. With an agreed purchase price of USD 330 per share, the offer is around 50% higher than the last closing price of Karuna shares.

Karuna, a company in the biopharmaceutical sector, has a promising drug in development, KarXT, which is currently being reviewed by the US Food and Drug Administration (FDA) for possible approval for the treatment of schizophrenia. KarXT is also being researched for further applications in Alzheimer's disease and bipolar disorder.

According to analysts, the drug, if approved, could generate annual sales of more than USD 6 billion in various therapeutic areas, as reported by the "Wall Street Journal". "We expect KarXT to drive our growth in the late 2020s and into the next decade," said Christopher Boerner", CEO of Bristol-Myers.

In addition to falling interest rates, takeovers could boost the share prices of second-tier companies. The large pharmaceutical companies, for example, have over USD 100 billion in cash at their disposal. Biotech companies, on the other hand, are attractive takeover candidates due to the sometimes exaggerated correction of recent years. In particular, the oncology, weight loss and neurology sectors are likely to drive mergers and acquisitions in the coming year, said Jefferies analyst Michael Yee on CNBC's "Fast Money" program last Friday.

The names he expects to be most involved in mergers and acquisitions in 2024 include Bristol-Myers, Pfizer, Merck and Gilead. Yee is convinced that the anti-inflation law will encourage pharmaceutical giants to "do more deals".

The biotech sector could outperform in the coming year as interest rates are cut back. Bristol-Myers Squibb announced another billion-dollar acquisition shortly before Christmas. The wave of acquisitions is expected to gain momentum in 2024, with Cardiol Therapeutics being considered a promising candidate for a merger.