Let’s discuss biotechnology. These companies offer a distinct set of benefits to investors, particularly those who are ready to take on more risk.

First off, product development lead times are notoriously long, and overhead is notoriously high for biotech companies but when a new treatment exhibits significantly positive clinical trial results or wins regulatory approval for commercialization, there is the potential for enormous gains in sales income and share appreciation.

For instance, Ambrx Biopharma’s stock recently increased by a staggering 1007% in a single day.

Solidly favorable outcomes from Phase 2 clinical research for the treatment of metastatic breast cancer were the foundation for that enormous gain.

The company’s medication candidate received a boost, but the immediate beneficiaries were the stockholders as the value of their holdings surged.

Not every biotech stock will increase by 1,000%, but these stocks frequently double in value in response to good news.

Of course, there is a chance that these stocks might decline just as much if a clinical trial is unsuccessful or a government regulator refuses to provide approval.

Fortunately for biotech investors, Wall Street stock analysts’ ranks include biotech specialists who can distinguish between the two.

This leads us to Needham analyst Ami Fadia, who has been keeping an eye on two clinical-stage biotech stocks with the potential to treble in value should future catalyst tests produce promising results.

Theseus Pharmaceuticals

Theseus Pharmaceuticals, a cancer research business in the clinical stages, will be the subject of our initial examination.

Theseus is focusing on the creation of tyrosine kinase inhibitors (TKIs), a revolutionary therapeutic with the potential to “outsmart” malignancies that are resistant to treatment.

There are now three tracks in the development pipeline for Theseus, two of which are in the discovery and preclinical stages, and one, THE-630, is conducting human clinical trials.

Gastrointestinal Stromal Tumors (GIST) that have shown resistance to current therapies may be treated with THE-630.

The Phase 1 site activation was finished in 3Q22, and patient enrollment is still continuing on for the drug candidate’s Phase 1/2 dose escalation and expansion trial.

The initial safety and pharmacokinetic data are anticipated to be released by the business in 2Q23, followed by additional Phase 1 data in 4Q23.

THE-349 has been meeting its pre-clinical development milestones, and Theseus anticipates submitting the IND for FDA approval in 2H23.

According to Ami Fadia of Needham, this is the ideal time to participate given the potential of the company’s medication candidates.

“Although the development of drugs for 2L GIST has been challenging, we believe THE-630 has the potential to outperform [Pfizer’s] Sutent in an H2H trial for 2L GIST and has a road to approval in 5L because it pre-clinically blocks all known activating and resistant mutations.

In 2035, we predict revenues of $1.2 billion… THE-349, another PRA-derived compound, pre-clinically inhibits all single, double, and triple mutations desired for a 4th gen EGFR+ NSCLC. By 2035, we project revenues of more than $2 billion.” Fadia expressed her opinion.

These are reliable sales projections, and Fadia bases her Buy rating on them.

Her $22 price prediction implies that There is a massive 275% upside for Theseus.

Despite there being just three recent analyst reports for THRX, they are all Buy ratings, giving the stock a Strong Buy consensus rating. At the current price of $5.87, the shares have an astounding 252% upside potential over the next year, according to analysts’ average price targets of $20.67.

Cogent Biosciences

Cogent Biosciences, the second biotech firm we’ll examine, is developing precise treatments for genetically based illnesses including different malignancies.

Bezuclastinib, a therapeutic candidate for the company, is undergoing a number of concurrent clinical trials for the treatment of gastrointestinal stromal tumors as well as advanced and nonadvanced systemic mastocytosis.

The PEAK, a Phase 3 research of bezuclastinib in combination with sunitinib and compared to sunitinib as a monotherapy, is now underway against GIST and was recently launched by Cogent.

During 1H23, the first data sets from the PEAK experiment will be accessible.

Additionally, bezuclastinib is being tested for the treatment of advanced systemic mastocytosis (AdvSM).

The SUMMIT trial is a randomized, double-blind, placebo-controlled, international, multicenter, Phase 2 clinical trial of bezuclastinib in patients with nonadvanced systemic mastocytosis.

The APEX Phase 2 study is currently ongoing, and preliminary data from that study was used to support the protocol for the trial (NonAdvSM). In 2H23, SUMMIT data is anticipated to be ready for presentation.

Fadia from Needham examines the company’s potential for sales and is impressed. She writes: “In AdvSM, bezuclastinib can have equivalent efficacy with improved safety than BPMC’s Ayvakit, notably on ICH as shown by APEX data, noting that clinical trials are ongoing and encouraging. Bezuclastinib may be more effective than Ayvakit in non-AdvSM patients while maintaining comparable safety. Sales of more than $1.2 billion are projected by 2030.”

“If safety is satisfactory, the combination of bezuclastinib and the existing SoC Sutent in 2L GIST should result in better outcomes than Sutent alone. We anticipate $300 million in sales by 2030,” the analyst continued.

Fadia rated COGT shares a Buy due to probable sales of $1.5 billion or more by the end of the decade.

With a price target of $24, she leaves the opportunity for a share increase of 100% over the following 12 months.

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