One thing that investors know for sure they would like to do in the next life is to come back as a stock analyst. It never fails, they will pound the table on a company over and over, and if that company hits a rough spot, the thesis that was awesome 50% higher is no longer relative after a bad quarter. The price gets cut, the stock is downgraded and you move on to the next big story.

As a result of a bad quarter or two, or less than stellar clinical data sometimes, top biotech companies are absolutely destroyed and thrown on the trash heap. We combed through the Merrill Lynch database and found three companies that at one time or another, when they were much higher than they are now, had analysts going crazy. The Merrill Lynch analysts still like them, have huge price targets and all are rated Buy.

Aduro Biotech

This stock had a super successful initial public offering back in the spring, but after skyrocketing up it has been cut in half. Aduro Biotech Inc. (NASDAQ: ADRO) is a clinical-stage immunotherapy company focused on the discovery, development and commercialization of therapies that transform the treatment of challenging diseases. Its technology platforms, which are designed to harness the body’s natural immune system, are being investigated in cancer indications and have the potential to expand into autoimmune and infectious diseases.

Aduro’s LADD technology platform is based on proprietary attenuated strains of Listeria that have been engineered to express tumor-associated antigens to induce specific and targeted immune responses. Based on compelling clinical data in advanced cancers, this platform is being developed as a treatment for multiple indications, including pancreatic, lung and prostate cancers, and mesothelioma and glioblastoma.

ALSO READ: Jefferies Has Very Compelling Value Stocks to Buy Now

Merrill Lynch remains very positive and noted that Aduro recently announced a milestone payment from Janssen for the submission of anIND for ADU-214 in advanced non-small cell lung cancer. The dose-escalating Phase 1 study (c40 patients) will evaluate safety and immunogenicity of intravenously administered ADU-214. Janssen is expected to commence the study by the end of this year. Aduro could be eligible to receive up to $786.5 million in additional milestone payments and royalties on worldwide sales.

The Merrill Lynch price target for the stock is $40, and the Thomson/First Call consensus price target is higher at $47. Shares closed Thursday at $27.02.
Sarepta Therapeutics

This is another top biotech that has been hit very hard this year. Sarepta Therapeutics Inc. (NASDAQ: SRPT) is a biopharmaceutical company focused on the discovery and development of unique RNA-targeted therapeutics for the treatment of rare, infectious and other diseases. It is primarily focused on rapidly advancing the development of its potentially disease-modifying Duchenne muscular dystrophy (DMD) drug candidates, including its lead DMD product candidate, eteplirsen, designed to skip exon 51. Sarepta is also developing therapeutics for the treatment of infectious diseases, such as drug-resistant bacteria and other rare human diseases.

With an FDA showdown approaching for two companies that have drugs to treat DMD, many think that Sarepta has a clear advantage over its direct competitor due to fewer side effects reported with its drug. Merrill Lynch is bullish in front of the FDA panel and the Prescription Drug User Fee Act (PDUFA), which is scheduled for the first quarter of next year.

Merrill Lynch recently reinstated coverage with a Buy rating and a $49 target. The consensus target is $45.62, and the stock closed Thursday at $24.28.

ALSO READ: 10 Brands That Will Disappear in 2016

PTC Therapeutics

This company falls into biotech binary event bucket. PTC Therapeutics Inc. (NASDAQ: PTCT) is a global biopharmaceutical company focused on the discovery, development and commercialization of orally administered, proprietary small molecule drugs targeting an area of RNA biology referred to as post-transcriptional control. Such processes are the regulatory events that occur in cells during and after a messenger RNA is copied from DNA through the transcription process. PTC’s internally discovered pipeline addresses multiple therapeutic areas, including rare disorders, oncology and infectious diseases.

PTC recently presented data from the Phase 3 ACT DMD study on Translarna (ataluren) for the treatment of nonsense mutation DMD. Although Translarna was safe and generally well tolerated, the primary endpoint was not statistically significant in the overall intent-to-treat study population. However, pre-specified meta-analysis of combined ACT DMD study and Phase 2b studies on Translarna demonstrated benefit across primary and key secondary efficacy endpoints.

Those positive results resonated well with Merrill Lynch, which thinks the drug continues to stay approved in the European Union. The company should complete the clinicals and submit the new drug application before the end of this year, with a likely PDUFA in the middle of 2016.

The Merrill Lynch price target is a gigantic $88, and the consensus target is $82.40. Considering that shares closed most recently at $27.01, this could be a moon-shot if analysts are correct.

ALSO READ: UBS Has 4 Safe Blue Chip Dividends to Buy, Even If the Market Has Topped

While these stocks are only suitable for very aggressive accounts that can afford big price swings and have a high risk tolerance, they also could bring huge upside if approvals are granted.

Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.