If you're looking for a stock that could make dramatic gains in the foreseeable future, the life-science industry has you covered. Recent notes from an analyst at Bank of America imply gains of over 100% from recent prices for a drugmaker that's been having a lousy year.

Shares of Apellis Pharmaceuticals (APLS 0.91%) are down by about 62% from a peak they reached earlier this year. Investment bank analysts who follow the company closely think its best days are still ahead. Bank of America recently issued a $61 per share price target for Apellis, which implies a 129% gain from recent prices. 

Before rushing out to buy a stock just because a Wall Street analyst says it can more than double your money, it's important to realize that Bank of America can quietly adjust its price target downward if things don't work out. Repairing the damage a bad call can cause your portfolio isn't nearly as easy.

Why Apellis Pharmaceuticals tanked this year

Shares of Apellis Pharmaceuticals have been under pressure because investors are concerned about the sales trajectory of its vision preservation treatment, Syfovre. Although approved in the U.S., European regulators issued a negative opinion of its marketing authorization application this year.

Last February, the Food and Drug Administration (FDA) approved Syfovre to treat geographic atrophy (GA), an advanced form of age-related macular degeneration. Second-quarter Syfovre sales came in at an annualized $618 million.

The Syfovre launch has been successful but its position as the first available treatment for GA didn't last long. Last August, the FDA approved Izervay to treat the same patient population.

Astellas Pharma (ALPMY 0.42%) invested $5.9 billion acquiring the company that developed Izervay. Competing with a large, determined pharmaceutical company won't be easy but so far it seems Apellis has the upper hand. Izervay sales grew slower than Syfovre's to reach an annualized $333 million during the quarter ended June.

Why Wall Street's bullish for Apellis Pharmaceuticals

Analysts are encouraged by Syfovre's resilience as an eye treatment despite competition with Izervay. With more than 1 million Americans impacted by GA, sales could top out above $2.5 billion annually in this indication alone. 

Plus, there's a chance the active ingredient in Syfovre, called pegcetacoplan can become a new treatment for patients with a pair of rare diseases called C3 glomerulopathy (C3G) and primary immune-complex membranoproliferative glomerulonephritis (IC-MPGN). Both diseases involve severe kidney damage and lack effective treatment options.  

The pivotal Valiant study randomized C3G and IC-MPGN patients to receive either pegcetacoplan or a placebo. Treatment with pegcetacoplan reduced the amount of protein in patients' urine, a signal of kidney damage by 68.1% which was significantly more than the placebo group.

Analysts are also encouraged by pegcetacoplan's safety profile. Investigators recorded more adverse events from patients given a placebo than from the group given the drug.

Pegcetacoplan is already approved to treat another rare kidney damage disease called paroxysmal nocturnal hemoglobinuria under the brand name Empaveli. There's less opportunity for blockbuster sales in the C3G and IC-MPGN spaces but revenue from this group could be significant. Altogether, pegcetacoplan's total sales could exceed $3 billion by 2030.

Time to buy?

At recent prices, Apellis Pharmaceuticals' market cap is about $3.3 billion or about 4.1 times annualized second-quarter sales. Commercial-stage biotech stocks typically trade at mid-single-digit multiples of annual sales, regardless of how high those sales run.

If total pegcetacoplan sales reach their expected peak, shares of this stock could rise to several times their present value. Adding a small amount of this growth stock to a diverse portfolio and holding it over the long run could be a smart move.