Goldman Sachs Identifies 2 Healthcare Stocks With up to 130% Upside Potential

By Jace Dela Cruz

Nov 23, 2023 02:02 AM EST

Goldman Sachs has identified two healthcare stocks with the potential for substantial gains, reaching up to 130%.

According to Goldman Sachs analyst Andrea Tan, healthcare stocks, known for their potential to turn sharply on new catalysts, present an intriguing mix of risk and reward for investors, TipRanks reported.

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NEW YORK, NEW YORK - SEPTEMBER 13: The Goldman Sachs logo is seen on at the New York Stock Exchange on September 13, 2022 in New York City.

Goldman Sachs on Krystal Biotech

The first pick of Goldman Sachs is Krystal Biotech, which recently transitioned from the research and development stage to the commercial phase.

Krystal gained US Food and Drug Administration (FDA) approval for Vyjuvek in May, marking the company's entry into the market. Vyjuvek is a gene therapy product designed to treat dystrophic epidermolysis bullosa (DEB), a severe genetically linked skin disease.

Tan emphasized the successful launch of Vyjuvek, with 284 patient start forms filed by the end of Q3, surpassing expectations and generating $8.6 million in product revenue. 

Krystal's positive earnings in Q3 and its promising pipeline of drug candidates for genetic diseases position the company for potential growth. Besides acknowledging Vyjuvek's strong launch, Tan sees additional potential in the Skin TARgeted Delivery platform for various indications.

Tan maintains a positive outlook on Krystal, giving it a Buy rating with a price target of $160, indicating a 58% upside potential.

READ ALSO: Goldman Sachs Says Global Economic Growth in 2024 Will Exceed Expectations 

Goldman Sachs Also Picks Iovance Biotherapeutics (IOVA)

The second healthcare stock picked by Goldman Sachs is Iovance, a biotech company focused on cancer treatments. Iovance employs tumor-infiltrating lymphocytes (TIL) to harness the patient's immune system against cancer cells. 

The company's most advanced drug candidate, lifileucel, is being tested against melanoma and cervical cancer, with regulatory submissions in progress.

Lifileucel, under study for both of these as a monotherapy and in combination with pembro, has reached the regulatory application stage for melanoma, with a PDUFA date set for February 24, 2024. 

The company is also seeking approval in the UK and Canada. Tan foresees substantial market potential for lifileucel, anticipating peak global sales of $1.5 billion in 2038.

She expressed optimism about Iovance's transition to a commercial company, citing lifileucel's best-in-class profile and positive early indications from key opinion leaders. Tan rated Iovance as a Buy with a price target of $12, suggesting a potential gain of approximately 130%.

Overall, both Krystal Biotech and Iovance receive Strong Buy consensus ratings from analysts, with positive reviews indicating confidence in their growth prospects. 

Investors may find these healthcare stocks attractive, considering their potential for significant gains based on upcoming catalysts and commercialization efforts. 

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