JP Morgan bullish on six Big Biotechs, rates nine others neutral or lower

JP Morgan said it was bullish on Insmed (NASDAQ:INSM), Denali (NASDAQ:DNLI), Immunocore (NASDAQ:IMCR), Crinetics (NASDAQ:CRNX), Mirum (NASDAQ:MIRM) and BioCryst (NASDAQ:BCRX), rating all six as overweight in a recent note that reinstated ratings for fifteen large cap biotech stocks.

The investment bank was less keen on Cervel Therapeutics (CERE), Alkermes (ALKS), Novocure (NVCR), Deciphera (DCPH), Stoke (STOK) and Esperion (ESPR), giving those six a neutral rating, and bearish on Amarin (AMRN), Emergent BioSolutions (EBS) and Nektar Therapeutics (NKTR), which were all rated as underweight.

For Insmed, JP Morgan said it expects the stock to “work higher” on the back of recent study updates and ahead of “highly anticipated” data from its ASPEN study of brensocatib in the treatment of non-cystic fibrosis bronchiectasis, which the bank sees as a potential blockbuster opportunity. The ASPEN data is expected in Q2 2024. JP Morgan set its price target for the stock at $36.

Denali shares, meanwhile, could see appreciation ahead of several readouts slated for 2025, in addition to a Phase 2 data for its ALS drug candidate DNL788 expected in the first half of 2024. JP Morgan also sees “multiple avenues for value creation” from the biotech’s pipeline, adding that “we are still in the early innings of the potential value” presented by the company’s BBB-crossing TV platform. The stock’s price target was set at $28.

The investment bank also continues to see upside for Immunocore shares in the wake of a “strong” launch for the oncology drug Kimmtrak. The bank highlighted the potentially “high value pipeline opportunity” with PRAME and a “de-risked” technology platform, setting its price target at $60.

JP Morgan said it sees Crinetics potentially benefitting from several catalysts over the next 12 months, adding it was bullish on the company in the wake of “robust” topline Phase 3 data for its lead candidate paltusotine. Crinetics’ price target was set at $35.

For Mirum, the bank said it sees an “attractive opportunity” for the drug Livmarli “supporting a valuation backstop for the stock” with further potential upside driven by the clinical de-risking of its drug candidate volixibat.

JP Morgan is also bullish on BioCryst, calling the company’s drug Orladeyo a “key value driver for the stock,” with its broad pipeline representing a potential for upside.