1 Nasdaq Stocks Are Down 62% This Year, Which Could Double Your Money, According To A Wall Street Analyst

If you’re looking for a stock that could post dramatic gains in the near future, consider this biopharma player that’s having a down year so far.

Shares of Apellis pharmaceutical products (APLS 2.47%) are down about 62% from the peak they reached in January. However, investment bank analysts who follow the drugmaker believe its best days are still ahead. Bank of America Apellis recently imposed a price target of $61 per share, which represents a 129% upside from recent prices.

Before you rush to buy a stock just because a Wall Street analyst says it could more than double your money, it’s important to realize that Bank of America can always adjust its price target downwards if things change. not succeed. Repairing the damage a bad decision can cause to your portfolio isn’t that easy.

Why Apellis Pharmaceuticals plummeted this year

Shares of Apellis Pharmaceuticals are under pressure as investors worry about the sales trajectory of its vision preserving treatment, Syfovre. Although Syfovre is approved for use in the US, a European regulatory commission has repeatedly issued a negative opinion on its application for a marketing authorization in the EU this year.

In February 2023, the Food and Drug Administration (FDA) approved Syfovre for the treatment of geographic atrophy, an advanced form of age-related macular degeneration. Syfovre’s second-quarter revenue was $618 million on an annualized basis.

Syfovre’s launch was successful, but its position as the only available treatment for geographic atrophy did not last long. In August 2023, the FDA approved Izervay to treat the same patient population.

Japanese Astellas Pharma (ALPMY -0.57%) invested $5.9 billion to acquire the company that developed Izervay. Competing with a large, staid pharmaceutical company won’t be easy, but so far Apellis appears to have the upper hand. Izervay’s revenue grew more slowly than Syfovre’s, reaching annualized revenue of about $333 million during the quarter ended June 30.

Why Wall Street is bullish on Apellis Pharmaceuticals

Analysts are encouraged by Syfovre’s resilience as an eye treatment despite competition from Izervay. With more than 1 million Americans affected by geographic atrophy, sales on this indicator alone could top $2.5 billion per year.

Additionally, there is a chance that the active ingredient in Syfovre, called pegcetacoplan, could gain approval as a treatment for patients with a pair of other rare diseases: C3 glomerulopathy (C3G) and primary immune complex-membranoproliferative glomerulonephritis (IC-MPGN). Both diseases cause serious kidney damage and lack effective treatment options.

In a phase 3 trial, C3G and IC-MPGN patients were randomized to receive pegcetacoplan or a placebo. Treatment with pegcetacoplan reduced the amount of protein in the patient’s urine – a signal of kidney damage – by 68.1%, which was significantly more than in the placebo group.

Analysts are also encouraged by pegcetacoplan’s safety profile. Researchers recorded more side effects in patients who received the placebo than in the group that received the drug.

Pegcetacoplan is already approved under the brand name Empaveli for the treatment of another rare kidney damage disease, paroxysmal nocturnal hemoglobinuria. There are fewer options for this blockbuster sales in the C3G and IC-MPGN spaces, but revenues from this group could be significant. Overall, pegcetacoplan’s total sales could exceed $3 billion by 2030.

Time to buy?

Apellis Pharmaceutical products market capitalization amounts to approximately $3.3 billion – approximately 4.1 times second quarter annualized revenue. Commercial-stage biotech stocks typically trade at a mid-single-digit multiple of their annual sales, regardless of how high those sales are.

If total sales of pegcetacoplan reach their expected peak, this stock could rise to several times its current value. Adding a small position in this growth stock to a diverse portfolio and holding it for the long term can be a smart move.

Bank of America is an advertising partner of The Ascent, a Motley Fool company. Cory Renauer has no position in any of the stocks mentioned. The Motley Fool holds positions in and recommends Bank of America. The Motley Fool has one disclosure policy.