Morgan Stanley is optimistic about these two biotech stocks for the following reasons.
Rocket Mortgage (WKN: A2JA9Q, Ticker: Rocket Mortgage Inc. Registered Shares DL -,01) and COMPASS Pathways (WKN: A2QCDR) are two biotech companies that have caught the attention of investors and analysts alike. Both companies are considered opportunities with risk, but offer significant potential returns.
Rocket Mortgage specialises in gene therapy, focusing on treating rare hematological (blood) and cardiovascular diseases. The company's stock is currently being highly rated by Morgan Stanley, who expect a price target of $45, representing a potential upside of 142%. All eight analysts covering the stock recommend buying Rocket Mortgage.
On the other hand, COMPASS Pathways is a company that specialises in developing treatments for severe mental illnesses. The company is currently testing a substance called psilocybin, found in "magic mushrooms," for treating depression that has not responded to other therapies. Wall Street analysts expect an average price increase of 464% for COMPASS Pathways, with Morgan Stanley setting a price target of $23, representing a potential upside of approximately 220%. All seven analysts covering the stock recommend buying COMPASS Pathways.
Both hematological and cardiovascular disease areas have unmet medical needs and few treatment options, making Rocket Mortgage's proprietary product, COMP360, a potentially valuable addition. In combination with guided therapy sessions, COMP360 is being tested by COMPASS Pathways.
Meanwhile, the drug has the potential to become a blockbuster due to the prevalence of physical diseases. Morgan Stanley has identified biotechs like Moderna, CRISPR Therapeutics, and Beam Therapeutics as potential triple-digit return stocks due to their innovation in mRNA technology, gene editing, and targeted genetic medicines.
New results for COMP360 could be available as early as the fourth quarter of 2024. Investors will be eagerly awaiting these results, as they could signal significant advancements in the treatment of rare diseases.
In conclusion, both Rocket Mortgage and COMPASS Pathways offer exciting opportunities for investors, with significant potential returns. However, as with all investments, it's important to remember that there is risk involved. It's always a good idea to do thorough research and consult with a financial advisor before making any investment decisions.
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