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.

FibroGen

This one has big upside potential for investors with only a moderate risk profile. FibroGen Inc. (NASDAQ: FGEN) is a research-based biopharmaceutical company focused on the discovery, development and commercialization of novel therapeutics to treat serious unmet medical needs. It has capitalized on extensive experience in fibrosis and hypoxia-inducible factor (HIF) biology to generate multiple programs targeting various therapeutic areas.

The company’s most advanced product candidate, roxadustat (FG-4592), is an oral small molecule inhibitor of HIF prolyl hydroxylases (HIF-PHs) in Phase 3 clinical development for the treatment of anemia in chronic kidney disease. The second product candidate, FG-3019, is a monoclonal antibody in Phase 2 clinical development for the treatment of idiopathic pulmonary fibrosis, pancreatic cancer and liver fibrosis.

Leerink cites the massive $1 billion clinical and developmental milestone payment potential from the company’s partner, AstraZeneca and Astellas, and up to $2,300 million in cash expected by the end of this year. The firm also notes a potential $500 million enterprise value for the large Phase 2 and Phase 3 assets.

The $52 Leerink price target is higher than the consensus target of $37.80. The stock closed on Thursday at $30.47.

Inter-Cellular Therapies

Intra-Cellular Therapies Inc. (NASDAQ: ITCI) is developing novel drugs for the treatment of neuropsychiatric and neurodegenerative disease and other disorders of the central nervous system (CNS). It is developing its lead drug candidate, ITI-007, for the treatment of schizophrenia, behavioral disturbances in dementia, bipolar disorder and other neuropsychiatric and neurological disorders.

The company also is utilizing its phosphodiesterase platform and other proprietary chemistry platforms to develop drugs for the treatment of cognitive deficits in schizophrenia and other CNS disorders. In addition, Intra-Cellular Therapies is developing inhibitors against other targets for CNS indications such as Alzheimer’s and Parkinson’s disease and depression, and non-CNS indications such as cardiovascular disease.

The first Phase 3 study for the ITI-007 reinforced efficacy and included an outstanding safety and tolerability profile. The analysts remain bullish on the second Phase 3 data that is due out in the middle of this year. Competitive on efficacy with Risperdal, the drug is appealing for schizophrenic maintenance, which they see as a $1 billion to $2 billion market. They are even more positive on the use in bipolar and adjunctive depression arena.

Leerink has a $95 price objective, and the consensus target is $77.542. Shares ended last week at $52.79.

Neurocrine Biosciences

This company continues to report success partnering with AbbVie. Neurocrine Biosciences Inc. (NASDAQ: NBIX) discovers and develops innovative and life-changing pharmaceuticals, in diseases with high unmet medical needs, through its novel R&D platform, focused on neurological and endocrine based diseases and disorders.

Its two lead late-stage clinical programs are elagolix, a gonadotropin-releasing hormone antagonist for women’s health that is partnered with AbbVie, and NBI-98854, a vesicular monoamine transporter 2 inhibitor for the treatment of movement disorders. Neurocrine intends to maintain certain commercial rights to its VMAT2 inhibitor for evolution into a fully integrated pharmaceutical company.

Many Wall Street analysts and Leerink believe that Valbenazine will become the standard of care for patients suffering from tardive dyskinesia, a neurological disorder that may be caused by long-term or high-dose use of antipsychotic drugs. In fact, they see a potential for $1.3 billion is sales by 2025.

Leerink has a $71 price objective, and the consensus target is $70.14. The stock closed last Thursday at $56.57.

It almost goes without saying that these stocks are only suitable for extremely aggressive account that can withstand big fluctuations. With that caveat in place, all the Leering top picks have outstanding upside and in most cases already have released compelling clinical data.

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