This rare muscle disease play can rally more than 50%, BofA says

Avidity Biosciences stock has more room to run thanks to the company’s pipeline of multiple treatments for rare muscle disorders, according to Bank of America. Analyst Geoff Meacham initiated research coverage of the San Diego-based biotech with a buy rating. Meacham’s $40 price target implies potential upside of 56% from Thursday’s close, building on an already-strong year where shares have more than doubled. “With an innovative platform and a path to commercialization as early as 2026, we view RNA as an attractive risk-reward opportunity,” Meacham told clients, referencing the stock’s ticker. Avidity has a therapeutic platform — antibody oligonucleotide conjugates — that was well-received at the time it went public in 2020, Meacham said. But shares were hurt by a clinical hold on Avidity’s leading program for treating an uncommon muscle disorder, DM1. The program, tested in the Marina trial, recently saw long-term data that has “helped lift that key overhang on the stock,” Meacham said. And that can sets the stock up for multiple upcoming catalysts in 2024 that should drive more upside, the analyst noted. Those catalysts are tied to two other drugs in the muscle disorder space that are expected to report data this year, according to Meacham. One is for a Duchenne muscular dystrophy treatment, while the other is connected to a trial around facioscapulohumeral muscular dystrophy. Taken together, Meacham said the company can see “robust” demand for these offerings, with peak risk-adjusted sales expected to hit $2.3 billion by 2033. “We think these clinical data updates further support pipeline and platform value, and should help drive investor interest in 2024,” he said. The biopharmaceutical stock has already surged more than 180% so far in 2024, erasing losses from last year’s drop of over 59%. The stock came public at $18 a share. RNA 1Y mountain Avidity, 1 year