Investors looking for stocks that can make dramatic gains can find some in the biopharmaceutical industry. Right now, there are a pair of biopharma stocks that Wall Street expects to rocket higher in 2025.
The Food and Drug Administration approved CRISPR Therapeutics' (CRSP -2.56%) first treatment last December, and its successful launch could push the stock much higher. Investment bank analysts also expect Iovance Biotherapeutics (IOVA -3.03%) to soar in 2025.
Before chasing exciting price targets, though, it's important to remember that analysts who set lofty expectations can quietly adjust them downward if things don't work out. Repairing the damage a poorly performing investment can inflict on your portfolio isn't as easy. That said, let's look at some reasons these stocks are expected to soar, and consider if they could be right for your portfolio.
The case for CRISPR Therapeutics
CRISPR Therapeutics stock has fallen by about 51% from the peak it reached in February. Investment bank analysts who follow the gene therapy developer expect it to rebound. The average price target on the stock implies an 82% gain over the next 12 months.
CRISPR Therapeutics stock slipped in November following its third-quarter report. Casgevy, a once-and-done treatment for sickle cell disease and beta-thalassemia, earned approval last December, but CRISPR and its collaboration partner, Vertex Pharmaceuticals, still aren't realizing significant revenue from it.
Casgevy is neither a pill nor an injection: It's an infusion of genetically modified stem cells derived from the patient who will receive them. CRISPR and Vertex aren't recording sales for Casgevy yet, but approximately 40 patients had begun the cell collection process as of mid-October. At a list price of about $2.2 million per patient, it won't take many treatments to produce a significant revenue stream.
CRISPR Therapeutics finished September with $1.9 billion in cash and equivalents on its books after burning through $320 million during the first nine months of 2024. If Casgevy sales start rolling in, that cash cushion could last for several years.
The next therapy likely to emerge from CRISPR's pipeline could be much easier to sell. Candidate CTX112 is an off-the-shelf therapy for cellular lymphoma that recently produced some compelling data in a phase 1/2 trial. Among 12 patients treated with four ascending dosages, six achieved complete remission, and the treatment shrank the tumors of another two. Half of the patients' cancers still hadn't worsened six months after their initial response.
Of the several next-generation cell-based therapies being tested by CRISPR Therapeutics, CTX112 is the furthest along the clinical trial path. With a big pile of cash and incoming sales from a commercial-stage product, this gene therapy specialist's best days are probably still ahead of it.
The case for Iovance Biotherapeutics
Shares of Iovance Biotherapeutics have fallen by about 55% from the peak they hit in February, but analysts who follow the stock expect a big rebound in 2025. Their consensus price target of $23.77 implies a 204% gain over the next 12 months.
In February, the company earned its first drug approval for Amtagvi as a treatment for advanced-stage melanoma. Like Casgevy, Amtagvi is an autologous treatment manufactured in batches of one from each intended patient's stem cells.
Though it was only approved for the limited population of melanoma patients whose cancers had progressed after treatment with immunotherapies such as Keytruda, Amtagvi's initial launch has been successful. Sales in the third quarter reached an annualized rate of $234 million, and they're rising fast. Management expects 2025 sales to land in a range between $450 million and $475 million.
Amtagvi's U.S. launch is progressing well, but this is the only place cancer patients can access it so far. The European Medicines Agency is reviewing the treatment's application now, and is widely expected to give it a green light in the second half of 2025.
In addition to a global melanoma population, Amtagvi could become a blockbuster lung cancer treatment. The drug is being tested in a phase 2 trial with lung cancer patients. The results of that study, expected in 2025, could drive the stock through the roof.
Time to buy?
Pharmaceutical stocks tend to trade at mid-single-digit price-to-sales ratios. On this yardstick, Iovance appears undervalued. The company's market cap has fallen to about $2.4 billion, which seems a bit too low.
U.S. Amtagvi sales are expected to land in a range between $450 million to $475 million next year. If this therapy earns approval in the EU as expected, annual sales could exceed $1 billion in a few short years.
Before investing in Iovance, it's important to remember that government regulators don't care about corporate stock prices. If your risk tolerance isn't high enough to handle a share price decline if European regulators pan Amtagvi, you should probably watch this story play out from the sidelines.
Casgevy was the first gene therapy approved for sickle cell disease and beta-thalassemia that uses CRISPR-based gene editing techniques, but it isn't the only option for these patient populations. Bluebird bio's gene therapies Zynteglo and Lyfgenia were recently approved to treat beta-thalassemia and sickle cell disease, respectively.
While CRISPR Therapeutics is a more widely recognized name, the slow launch for Casgevy and its much higher valuation make it a far riskier investment than Iovance. It would probably be best to keep this stock on your watch list instead of in your portfolio.
