Piper Sandler listed the three biotech stocks of choice for 2024, citing attractive valuations and rich product launch channels.

The biotech industry became a popular sector during the peak of the pandemic in 2021, but the past two years have lagged behind$S&P 500 Index (.SPX.US)$(SPX) The current situation is improving, and the industry's performance is picking up. It is expected that the Fed's interest rate cut next year will boost it.

Piper Sandler analysts Edward Tenthoff and Thad said, “After another difficult year, there are signs that the biotech industry will begin to recover by 2024. The suspension of interest rate hikes will solve the biotech financing problem to a certain extent, and mergers and acquisitions are still active.”

Analysts tend to$Arrowhead Pharmaceuticals (ARWR.US)$, which reaffirmed the stock's incremental rating. The company plans to release progress such as phase 3 trial data of plozasiran for the treatment of familial chylomicronemia syndrome and phase 3 trials for the treatment of severe hypertriglyceridemia in mid-2024. It also hopes to conduct cardiovascular outcome tests on plozasiran or zodasiran to evaluate their effects on mortality and non-fatal strokes.

According to data from analysis company GlobalData, Plozasiran and Zodasiran's sales will reach US$651 million by 2030 and US$399 million in 2029, respectively.

Since the beginning of the year, the share price has dropped nearly 20% to $31.03. Piper Sandler expects the company's experimental product line to increase its share price by 90% over the next 12 months to $59 per share.

The investment bank's other preferred stock is$Legend Biotech (LEGN.US)$. The pharmaceutical company's Carvykti therapy is a CAR-T therapy that targets B-cell maturation antigens. It is mainly used for clinical treatment of patients with malignant blood diseases and malignant tumors. It has previously obtained listing approval from the US Food and Drug Administration and Japan's Ministry of Health, Labor, and Welfare, and conditional marketing approval from the European Union.

The investment bank believes that Legendary Biotech's Carvykti therapy is the best in the industry for treating adult bone marrow cancer, and demand far exceeds supply.

Legendary creatures and$Johnson & Johnson (JNJ.US)$Its Janssen Biotech co-developed and commercialized the drug Carvykti.

Piper Sandler expects Carvykti's revenue to jump from $506 million in 2023 to $1.05 billion in 2024, and points out that Legend Biotech and Janssen Biotech plan to increase global supply to 10,000 doses per year by the end of 2025.

Analysts predict peak revenue could exceed $5 billion as production levels increase. In addition to Carvykti, Legendary Creatures is also developing a “rich product line” to treat different cancers.

In line with this, the company announced last month that it is$Novartis AG (NVS.US)$A licensing agreement was signed to jointly develop and commercialize cell therapies.

Legendary Creature's share price is up 20.5% year-to-date to $58.70. Piper Sandler expects the stock price to rise 53.3% to $90 over the next 12 months.

$Alnylam Pharmaceuticals (ALNY.US)$Also included in Piper Sandler's Hot Stock List, the drug is used to treat polyneuropathy due to its Amvuttra potential in phase III clinical trials.

Piper Sandler expects Amvuttra's sales to grow from $550 million in 2023 to $1.13 billion in 2025. The agency also mentioned Alaren's plans to advance in drug trials and research to treat patients with severe hypertension and Alzheimer's disease.

Alan's stock price has fallen nearly 16% year to date, to $196.57. Piper Sandler expects its share price to reach $217 within the next 12 months, with a potential increase of about 10.3%.

Editor/Corrine