Raymond James bullish on biotech firms on favorable valuation

Investing.com -- Raymond James started coverage on biotechnology companies, rating Avidity Biosciences and Disc Medicine at Strong Buy and assigning Outperform ratings to Dyne Therapeutics, Tectonic Therapeutic, and Wave Life Sciences (NASDAQ: WVE), pointing to a sector-wide opportunity amid “suppressed valuations.”

Recent market weakness has created an attractive setup for investors willing to take on risk in high potential clinical-stage names, with upcoming catalysts likely to re-rate shares across several of its covered companies.

Raymond James initiated Avidity Biosciences at Strong Buy with a $65 price target, calling its AOC (antibody oligonucleotide conjugate) platform “ready for prime time.”

The firm sees high conviction in Avidity’s lead candidate del-zota for Duchenne muscular dystrophy and highlighted significant upside from potential first-mover drugs targeting DM1 and FSHD, both of which have large market opportunities.

Disc Medicine was also rated Strong Buy, with an $89 target.

Raymond James expects upside from bitopertin, its lead program in erythropoietic protoporphyria (EPP) and X-linked protoporphyria (XLP), and said the broader pipeline provides “two free call options.”

For Dyne Therapeutics, the firm assigned an Outperform rating with a $37 target, arguing that the market is undervaluing DYNE-101, its DM1 program.

It believes regulatory clarity could lift sentiment.

Tectonic Therapeutic, rated Outperform with a $76 price target, was described as having one of the most attractive risk/reward profiles in the firm’s coverage.

Its TX45 asset is being tested in pulmonary hypertension and has shown early clinical activity.

Wave Life Sciences was rated Outperform with a $14 target, with Raymond James citing favorable risk/reward into key Phase 2 data updates in obesity and alpha-1 antitrypsin deficiency in the second half of 2025.

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