While Nvidia (NVDA) is once again the standout performer in the S&P 500 Index ($SPX) so far this year, with its stock soaring 85% since the beginning of 2024, biotech stocks are coming on strong. As the next wave of artificial intelligence (AI) adoption rolls out to the pharma industry, even Nvidia itself is investing in drug discovery - and meanwhile, anti-obesity treatments are pushing stocks like Novo Nordisk (NVO) to new highs.

Following a nearly 50% uptick in novel drug approvals by the FDA during 2023, it looks as though the biotech industry may be headed for a comeback. Against this backdrop, here are five biotech stocks poised for notable growth. Each has a consensus rating of “Buy” or better among the analysts in coverage, with room to rally 26% or more to Wall Street's mean price target.

Biotech Stock #1: Biogen (BIIB)

Biogen (BIIB), based in Cambridge, Massachusetts, is a prominent biopharmaceutical company focusing on neuroscience and neurology. It offers a diverse range of treatments, notably for multiple sclerosis, spinal muscular atrophy, and Alzheimer's disease. Key products include Avonex, Tysabri, Tecfidera, and the new Alzheimer's drugs Leqembi and QALSODY. Biogen's market capitalization stands at $31.62 billion.

The stock's year-to-date performance is less than stellar, as BIIB shares are down 15.3%, largely driven by a Q4 revenue miss.

Overall, analysts have a consensus rating of "Moderate Buy" on BIIB stock, with a mean target price of $299.78 - which indicates an upside potential of approximately 36.7% from current levels. 

Among 31 analysts in coverage, Biogen has 19 "Strong Buy" ratings, 3 "Moderate Buy" ratings, and 9 "Hold" ratings.

Biotech Stock #2: Kiniksa Pharmaceuticals (KNSA)

Kiniksa Pharmaceuticals (KNSA) is a biopharmaceutical company focused on discovering, acquiring, developing, and commercializing therapeutic medicines. The company has managed substantial revenue growth in recent years, and is net income positive on an annual basis - a significant operational achievement for a small biotech company. Kiniksa Pharmaceuticals has a market capitalization of $1.47 billion. 

The biotech company's shares have risen 19.3% so far this year.

All four analysts following KNSA stock have a unanimous rating of "Strong Buy." The mean target price of $28 indicates an upside potential of approximately 33.8% from current prices.

Biotech Stock #3: SpringWorks Therapeutics (SWTX)

SpringWorks Therapeutics (SWTX) acquires, develops, and commercializes medicines for rare diseases and cancer patients. Its lead product candidate is nirogacestat, which targets desmoid tumors. It is also developing other oncology candidates, like mirdametinib, for various indications.

SWTX stock is up nearly 44% since the start of the year, aided by a revenue beat in its most recent earnings report. The biotech's market capitalization is about $3.86 billion.

SWTX stock has a rating of "Strong Buy" from all 8 analysts offering up an opinion. The mean target price from this bullish group is $66.43, implying a 26% premium to current levels.

Biotech Stock #4: Relay Therapeutics (RLAY)

Relay Therapeutics (RLAY) is a clinical-stage precision medicine company, focused on small molecule therapeutic discoveries for targeted oncology and genetic disease treatments. The company leverages its Dynamo platform to aid in drug discovery.

Shares are down 6.9% on the year. RLAY currently commands a market capitalization of roughly $1.35 billion.

The stock maintains a "Strong Buy" consensus rating, based on 10 “Strong Buys” and 2 “Hold” ratings from the 12 analysts in coverage. The mean price target is $23.05, representing expected upside of 124.6% from current levels.

Biotech Stock #5: Adaptive Biotechnologies (ADPT)

Adaptive Biotechnologies (ADPT) is a biotechnology firm focusing on leveraging the genetics of the adaptive immune system to develop clinical products for disease diagnosis and treatment. It is particularly known for its clonoSEQ Assay, which is used in blood cancer patient care and drug development.

The company recently reported its financial results for Q4 2023, and offered an update on the strategic review of its business lines, for which it retained Goldman Sachs (GS) last year. “The MRD and immune medicine businesses had different value drivers, investment needs and talent requirements,” said CEO Chad Robins on the Q4 conference call. “We are evaluating various alternatives to unlock the full potential of each business and we're on track to communicate the final outcome at the end of this quarter.”

The commercial-stage biotechnology company holds a market capitalization of $523.8 million. Its stock is down 26.7% on the year so far.  

The firm has an average "Strong Buy" rating among nine analysts, based on 7 “Strong Buys” and 2 “Hold” recommendations. The mean price target of $7.29 is a premium of nearly 106% to ADPT's current price.