The biotechnology sector is filled with high-potential growth stocks. With advancements in artificial intelligence (AI), biotech remains at the cutting edge of medical and scientific innovation, driving breakthroughs in gene therapy, immunotherapy, and personalized medicine. Furthermore, early-stage biotech stocks offer growth exposure for investors with a high-risk appetite.
Zevra Therapeutics (ZVRA) and Syndax Pharma (SNDX) have earned a “Strong Buy” rating from Wall Street analysts, signaling their confidence in the company’s future growth prospects. Let’s take a closer look at why these two biotech stocks have earned this bullish rating.
Growth Stock #1: Zevra Therapeutics
With a market capitalization of $401.9 million, Zevra Therapeutics is a small-cap biopharmaceutical company focused on developing treatments for rare diseases with significant unmet needs, including Niemann-Pick disease, certain urea cycle disorders, and attention deficit hyperactivity disorder (ADHD). The company follows a strategy based on the belief that “there are boundless pathways and infinite possibilities” in drug development. So far this year, Zevra’s stock has dipped 11% compared to the broader market gain, presenting a buying opportunity.
A key product in Zevra Therapeutics’ pipeline is MIPLYFFA, which received FDA approval in September last year for use alongside miglustat. This orally administered treatment targets Niemann-Pick disease type C (NPC), a rare and progressive neurodegenerative disorder. The approval was a significant milestone, making MIPLYFFA the first FDA-approved therapy for NPC. Zevra’s portfolio also includes AZSTARYS, a once-daily medication for attention deficit hyperactivity disorder (ADHD) in patients aged six and older. The FDA approved AZSTARYS in 2021.
In November 2023, Zevra acquired Acer Therapeutics to expand its rare disease portfolio and added OLPRUVA to its commercial lineup. This acquisition enhanced revenue diversification and bolstered Zevra’s presence in the rare disease market. OLPRUVA provides a treatment option for patients with certain urea cycle disorders (UCDs).
In the third quarter, Zevra Therapeutics reported $3.7 million in net revenue, reflecting a 27.6% year-over-year increase. However, the company also posted a net loss of $33.2 million, largely due to its substantial investment in research, development, and commercialization within the rare disease sector, typical for an early stage biotech firm. Zevra’s pipeline also includes Celiprolol, currently in a Phase 3 clinical trial for vascular Ehlers-Danlos syndrome (VEDS), a rare genetic disorder affecting connective tissue. Additionally, its investigational candidate KP1077 is in a Phase 2 trial for treating idiopathic hypersomnia (IH) — a rare neurological sleep disorder — and narcolepsy. As of the third quarter, Zevra’s cash reserves stood at $95.5 million, which the company anticipates will sustain operations through 2027.
Analysts remain bullish on Zevra Therapeutics, with all eight analysts rating the stock a “Strong Buy.” This optimism stems from the FDA approval of MIPLYFFA, the company’s expanding product pipeline, and its strategic acquisitions. The average 12-month price target stands at $21.71, indicating potential upside of approximately 193% from the current stock price.
However, investors should be aware of the risks associated with biotech stocks, particularly those specializing in rare diseases. Challenges include high R&D expenses, regulatory uncertainties, and the complexities of commercializing treatments for small patient populations. Despite these risks, Zevra’s recent approvals, acquisitions, and strong pipeline position it well for potential long-term growth in the rare disease therapeutics market.
Growth Stock #2: Syndax Pharma
With a market capitalization of $1.2 billion, Syndax Pharmaceuticals is a commercial-stage biopharmaceutical company dedicated to building a diverse pipeline of cancer therapies. Its strategy includes developing both monotherapies and combination treatments to improve the effectiveness of existing cancer therapies. So far this year, SNDX stock is up 15.1%, outperforming the broader market.
In late November 2024, Syndax Pharmaceuticals launched Revuforj, the first and only FDA-approved menin inhibitor for treating relapsed or refractory (R/R) acute leukemia with a KMT2A translocation in adult and pediatric patients aged one year and older. Furthermore, in January 2025, Syndax announced that the FDA approved Niktimvo in 9-mg and 22-mg vial sizes. In partnership with Incyte (INCY), the company expects Niktimvo to be available for order in the U.S. by early February. The drug is indicated for the treatment of chronic graft-versus-host disease (cGVHD) and stands out as the first and only FDA-approved prescription therapy for cGVHD, giving Syndax a competitive advantage. Syndax also received $350 million from Royalty Pharma (RPRX) under a royalty funding agreement, based on U.S. net sales of Niktimvo upon launch.
As of the third quarter, Syndax Pharmaceuticals reported $399.6 million in cash, cash equivalents, and short- and long-term investments. Research and development expenses rose to $71.0 million, up from $39.1 million in the same period last year, primarily due to pipeline development and commercialization costs. As a pre-commercial biotech company, Syndax reported a net loss of $84.1 million, or $0.98 per share, for the quarter. However, the company expects its current cash reserves, royalty payments from Niktimvo, and anticipated revenue from launched products to drive it toward profitability.
Analysts maintain a “Strong Buy” rating on Syndax stock, with an average 12-month price target of $37.07, implying a potential upside of approximately 141%. The highest price target stands at $51. Out of the 15 analysts covering the stock, 14 rate it a “Strong Buy,” while one suggests a “Hold.” With a promising pipeline, recent regulatory progress, and a strong financial position, Syndax presents significant growth potential for investors. However, investing in commercial-stage biotech stocks comes with risks, as even approved therapies may take years to help the company be profitable.
