Goldman Sachs shares its top genome stock ideas, including BioMarin

Published Wed, Apr 11 20184:41 PM EDT

Gene therapy stocks are a huge opportunity for growth-oriented investors, according to Goldman Sachs. The firm is optimistic about this new innovative area of biotechnology, where scientists create disease treatments by editing or replacing human genes. "We believe investors underappreciate the potential for genome medicine to not only address rare diseases with no existing or limited treatments but also the much larger markets for common diseases," analyst Salveen Richter wrote in a note to clients entitled "The Genome Revolution" Tuesday. "We continue to see upside for the best positioned companies based on the combination of catalysts, rising TAMs [total addressable markets] and M & A potential." Richter estimates the market size for gene therapies could be as large as $4.8 trillion as "genes are the foundations of all biological activity." Here are three buy-rated stocks recommended by Goldman Sachs, along with the firm's current price targets. 1) Bluebird bio (BLUE) Goldman Sachs has a $308 price target for Bluebird bio shares, representing 77 percent upside to Wednesday's closing price. "The company is a "a triple threat with gene therapy, cell therapy and gene editing. … BLUE is in a leading position in the gene and cell therapy fields with several value drivers: 1) CAR T bb2121 (CELG-partnered) for multiple myeloma (MM, GSe $1.4bn peak revenue to BLUE in the relapsed/refractory setting); 2) LentiGlobin for rare blood disorders transfusion-dependent beta-thalassemia (TDT, GSe $1.2bn peak) and sickle cell disease (SCD, GSe $3.9bn peak) and 3) LentiD for childhood cerebral adrenoleukodystrophy CCALD (GSe $200mn peak)." 2) BioMarin (BMRN) The firm's price target on BioMarin shares is $132, which is 66 percent higher than Wednesday's closing price. "BMRN is a commercial-stage biotechnology company focused on developing drugs for rare diseases. … BMRN is also developing a best-in-class AAV5 based gene therapy val-rox which utilizes in-licensed technology from St Jude's Hospital and University College of London. To date, BMRN has presented impressive efficacy and safety from the current Phase 1/2, with two Phase 3 studies underway." 3) CRISPR Therapeutics (CRSP) Goldman Sachs has an $86 price target for CRISPR Therapeutics shares, representing 73 percent upside to Wednesday's close. "CRSP is pioneering the development of CRISPR/Cas9-based genome medicines and will be the first of these gene editing companies to enter the clinic in the EU (transfusion dependent beta-thalassemia post approval of the EU Clinical Trial Applications) and US (severe sickle cell disease post acceptance of the IND) in 2018."

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Gene therapy stocks are a huge opportunity for growth-oriented investors, according to Goldman Sachs.

The firm is optimistic about this new innovative area of biotechnology, where scientists create disease treatments by editing or replacing human genes.

"We believe investors underappreciate the potential for genome medicine to not only address rare diseases with no existing or limited treatments but also the much larger markets for common diseases," analyst Salveen Richter wrote in a note to clients entitled "The Genome Revolution" Tuesday. "We continue to see upside for the best positioned companies based on the combination of catalysts, rising TAMs [total addressable markets] and M&A potential."

Richter estimates the market size for gene therapies could be as large as $4.8 trillion as "genes are the foundations of all biological activity."

Here are three buy-rated stocks recommended by Goldman Sachs, along with the firm's current price targets.