The biopharmaceutical industry is thriving, with breakthroughs in treating obesity, metabolic dysfunction-associated steatohepatitis (MASH), and retinal disease. While giants like Eli Lilly and Company (LLY), Novo Nordisk (NVO), and Merck & Co., Inc. (MRK) dominate the headlines, it's the clinical-stage biopharma companies trading under $20 that are more often associated with game-changing investment returns.
EyePoint Pharmaceuticals, Inc. (EYPT) and Altimmune, Inc. (ALT) are two small biotech stocks that Wall Street analysts expect to rally more than 200% within the next year. These types of early-stage, niche market players often carry high volatility and risk, but equally high potential. For investors ready to embrace the risk, these stocks might just be the ticket to substantial gains.
Stock #1: EyePoint Pharmaceuticals
Incorporated in 1987, Watertown, Massachusetts-headquartered EyePoint Pharmaceuticals, Inc. (EYPT) is a clinical-stage biopharmaceutical company engaging in developing and commercializing therapeutics to improve the lives of patients with serious retinal diseases.
The company harnesses its cutting-edge Durasert E technology for sustained intraocular drug delivery. Its lead candidate, DURAVYU, blends vorolanib, a potent VEGF inhibitor, with Durasert E for lasting impact. EyePoint's innovative pipeline, including EYP-2301 and razuprotafib, offers promising solutions for serious retinal conditions.
With a market cap of $475.5 million, EyePoint Pharmaceuticals is a small-cap player. Its shares are typically volatile for a smaller biotech, down 62.1% on a YTD basis - even as EYPT still trades 54% above its 52-week low of $5.67, set last October.
Shares of EyePoint Pharmaceuticals soared 9.6% in a single session after the biotech company posted Q1 results on May 8. Revenue jumped 52.1% annually to $11.7 million, smashing expectations by 27.9%. The quarterly loss per share shrank slightly to $0.55.
EyePoint wrapped up the quarter with $299.3 million in cash and investments, securing a cash runway through the upcoming Phase 3 DURAVYU trials for wet AMD, expected in 2026.
As the company gears up to report Q2 earnings results on August 7, analysts predict EyePoint's loss per share to shrink 9.8% year over year to $0.55.
EYPT has a unanimous “Strong Buy” rating from all nine analysts covering the stock. The average analyst price target for EyePoint is $35.38, indicating a massive potential upside of 304%.
Stock #2: Altimmune
Founded in 1997, Altimmune, Inc. (ALT) is a clinical-stage biopharma company with a market cap of $431.8 million. Based in Gaithersburg, Maryland, it focuses on developing treatments for obesity, and recently wound down its liver disease operations. Altimmune's lead product, pemvidutide, is a GLP-1/glucagon dual receptor agonist in Phase 2 trials.
The small-cap stock is down 46.7% on a YTD basis, paring its 52-week return to 96.7%.
On May 9, Altimmune reported its Q1 earnings results, and the pre-revenue company managed to narrow its loss to $0.34 per share, even as it ramped up R&D expenses year over year.
In March 2024, Altimmune unveiled promising data from the Phase 2 MOMENTUM trial of pemvidutide for obesity, showing impressive weight loss while preserving lean mass. The company is gearing up for an End-of-Phase 2 meeting with the FDA in late Q3 2024 and will present comprehensive MOMENTUM data, which could be the next catalyst for the stock. Meanwhile, the Phase 2b IMPACT trial for MASH continues, with results expected in Q1 2025.
Altimmune ended Q1 with $182.1 million in cash and no long-term debt. The company is expected to report its Q2 earnings results on Thursday, August 8. Analysts tracking Altimmune expect its loss per share for the quarter to reach $0.34.
ALT stock has a consensus “Strong Buy” rating overall. Out of the seven analysts offering recommendations, five suggest a “Strong Buy,” and the remaining two advise a “Hold” rating.
The average analyst price target of $19.71 suggests that ALT stock has 228.5% upside potential from the current price levels.
On the date of publication, Sristi Suman Jayaswal did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
