Investors love when they find stocks that have the potential to rise 50% to 100% in a fairly short period. They just better keep in mind that they are probably taking on far more risk than if they were buying a traditional Dow Jones industrial stock or an index fund. AnaptysBio Inc. (NASDAQ: ANAB) has been called on to have as much as 82% upside in a Credit Suisse research report. The firm’s Martin Auster, reiterated his Outperform rating and has a $137 price target for AnaptysBio. There is a scenario in which Auster even sees as much as 200% upside.

After noting an increase in investor interest for AnaptsysBio lately, Credit Suisse sees a catalyst-rich calendar for the second half of 2019. The firm previously talked up the company having a best-in-class potential in the growing atopic markets. That said, the stock is a noted battleground stock as close to 14% of its float was shown to be in the short interest.

The company reported earnings back in early May and the company’s CEO is currently set to present information at the Jefferies 2019 Healthcare Conference on Friday, June 7.

At the heels of the upside call is that Credit Suisse’s research team continues to see an attractive risk-reward profile ahead of its etokimab Phase 2b readout in atopic dermatitis in the second half of 2019. As for ANB019 GPP data that is due mid-year, the report said:

ANB019 is an antibody targeting the IL-36 receptor; IL-36 has been implicated in the pathogenesis of generalized pustular psoriasis (GPP), a potentially life-threatening, rare, skin condition. GPP will be the first of three potential clinical readouts this year. While we believe there is limited value reflected in the stock for the program, upside into the back half of the year will be mostly a function of the etokimab atopic dermatitis Phase 2b data (with support from CRSwNP). We think positive GPP data will increase a theoretical floor for the stock and add optionality for the name.

While the potential upside is huge, Credit Suisse did warn that this is a high potential volatility company with the biology and strong early clinical proof-of-concept supporting high expectations. That said, the conviction is restrained by limited clinical evidence and and there is a debate on how high the efficacy bar is in AD/CRSwNP.

That said, here is the big upside endorsement: “We think this name has the potential for greatest next 12-month upside in our coverage universe.”

As far as how the stock might have closer to 200% in potential upside, Martin Auster and his team have a Blue Sky Scenario target price of $216. That would be the upside from positive readouts across multiple programs increasing PoS for asthma, atopic dermatitis and GPP/PPP. Again, that’s if everything goes right.

The firm’s downside, or Grey Sky Scenario, is $55.00. This would come from a failure across GPP/PPP, lower conviction on the atopic dermatitis, asthma, and no pipeline value.

AnaptysBio was last seen trading up 2% at $76.52 on Wednesday, and its 52-week trading range of $54.26 to $110.00 should offer the proof of just how volatile this stock can be (and has been). The consensus analyst target price is $129.00 according to Thomson Reuters (Refinitiv). AnaptsysBio currently has no product revenues to speak of, and analysts do not forecast any revenues in 2019 nor in 2020. Its market cap is roughly $2 billion at the current level.

Also worth noting, the stock has received a Buy rating from H.C. Wainwright, an Overweight rating from JPMorgan, and an Overweight rating from JMP Securities.

Analyst calls of this sort, particularly noting the potential for greatest next 12-month upside, are sure to garner some interest. That said, with no revenues yet nor expected to come soon and no products to evaluate, shares of AnaptysBio would only be suitable for the most aggressive investors who have an understanding for the risks and the pain that can be felt when biotech upside disappoints.

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