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Prediction: This Pharma Stock Will Be the Best Performer the Rest of 2024
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24/7 Wall St. Insights
- Market pullbacks can make nervous investors leery of investing in industries that are speculative in nature.
- Yet, Wall Street still has big expectations for Vir Biotechnology Inc. (NASDAQ: VIR).
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Market pullbacks can make nervous investors leery of investing in industries that are more speculative in nature, such as pharmaceuticals and biotechnology. In a sector as rich in opportunities as this one, though, there will be some that are undervalued for one reason or another.
Here are some of the biotech and pharma stocks for which analysts have big expectations. All their share prices are expected to double or more in the coming year, and all have consensus Buy ratings.
| Stock | Mean Target | Upside |
| Arvinas Inc. (NASDAQ: ARVN) | $66.22 | 176.6% |
| Autolus Therapeutics PLC (NASDAQ: AUTL) | $10.69 | 149.2% |
| Day One Biopharmaceuticals Inc. (NASDAQ: DAWN) | $39.88 | 206.3% |
| Dynavax Technologies Corp. (NASDAQ: DVAX) | $25.75 | 157.2% |
| Intellia Therapeutics Inc. (NASDAQ: NTLA) | $69.61 | 212.3% |
| Relay Therapeutics Inc. (NASDAQ: RLAY) | $21.51 | 206.0% |
| Structure Therapeutics Inc. (NASDAQ: GPCR) | $85.11 | 147.4% |
| Tarsus Pharmaceuticals Inc. (NASDAQ: TARS) | $57.38 | 172.1% |
| Vir Biotechnology Inc. (NASDAQ: VIR) | $33.86 | 298.9% |
| Zai Lab Ltd. (NASDAQ: ZLAB) | $53.71 | 213.4% |
The standout on that list is Vir Biotechnology. Analysts anticipate the stock has lots of room to run. Does that mean that it is undervalued? Or has one overzealous analyst skewed the mean?
Why Invest in Vir?
Vir Biotechnology stock is down more than 34% from its 2019 initial public offering (IPO) share price. It is almost 87% lower than its all-time high. The company says it is harnessing its deep immunology expertise and cutting-edge technologies to address infectious diseases, viral-associated diseases, and immune targeting. Last year, it was selected as the fastest-growing company in North America. The share price has been volatile so far this year, bouncing between about $13.00 and $7.50. Is it poised for a big upswing? What does Wall Street expect?
Vir, the Company
This immunology company develops therapeutic products to treat and prevent serious infectious diseases. Its clinical development pipeline consists of product candidates targeting hepatitis and human immunodeficiency virus (HIV). The company’s preclinical candidates include those targeting influenza, respiratory syncytial virus (RSV), and human papillomavirus (HPV).
The company has grant agreements with Bill & Melinda Gates Foundation and National Institutes of Health, as well as license agreements and collaborations with Brii Biosciences, Alnylam Pharmaceuticals, MedImmune, WuXi Biologics, Glaxo Wellcome, GlaxoSmithKline Biologicals, and Samsung Biologics.
Vir headquarters are in San Francisco. The company was founded in 2016, and it went public in the fall of 2019. Competitors include some of the companies mentioned above and Editas Medicine Inc. (NASDAQ: EDIT), Moderna Inc. (NASDAQ: MRNA), and Sarepta Therapeutics Inc. (NASDAQ: SRPT).
The company just reported a second-quarter net loss and revenue below expectations. Back in May, the company named its new chief medical officer. As mentioned, Vir was selected as the fastest-growing company in North America last year. And it is a top Bill Gates biotech stock pick.
Vir, the Stock
The share price is up about 14% from the 52-week low but still down around 13% year to date. The Nasdaq is about 8% higher since the beginning of the year. Note that the $33.86 consensus price target is well above both the current share price and the 52-week high. Six of nine analysts who follow the stock recommend buying shares. Barclays just reiterated its Overweight rating, and Morgan Stanley maintained an Equal Weight rating back in June.
Institutional investors hold more than 85% of the shares. BlackRock is a beneficial owner, and Vanguard and State Street also have notable stakes. More than 89 million shares, or over 53% of the float, are held short. A director sold 4,000 shares back in June.
Wall Street expectations for where the stock goes in the next 52 weeks vary but are all positive. Not only does the high price target suggest huge upside potential, but so does the consensus target. And note that targets have been rising lately.
| Low target | $15.00 | 73.4% |
| Mean target | $33.86 | 291.4% |
| High target | $110.00 | 1,171.7% |
What’s with the enthusiasm for the stock? There is the restructuring of the company, including staff reduction, to focus on its most promising opportunities that was announced with the latest quarterly results. Can Vir reduce its cash burn and reinvigorate revenue in order to remain a growth story? Wall Street seems to think so.
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