Jefferies Identifies Three Biotech Firms with Blockbuster Drug Potential

Investment firm Jefferies has identified three biotechnology companies it believes are undervalued and possess strong commercial prospects, according to a recent analyst note. The firm suggests that in a challenging macroeconomic environment marked by rising interest rates, investor focus is shifting toward late-stage and commercial-stage biotech firms with significant product launch potential.

Shifting Investor Focus

Jefferies noted that pressure from higher interest rates on small and mid-cap biotech stocks is prompting a re-evaluation of the sector. As a result, companies with near-term catalysts and clear paths to commercialization are becoming more attractive. The three highlighted companies—Delphia Therapeutics, Axsome Therapeutics, and BridgeBio Pharma—all fit this profile, with key product launches and data readouts on the horizon.

Pipeline and Peak Sales Outlook

Jefferies detailed the specific assets and sales potential for each company, underscoring their blockbuster potential.

Ad

• Delphia Therapeutics (DFTX): The company's oral psychedelic, DT120, has shown positive Phase III results for major depressive disorder and generalized anxiety disorder. Jefferies estimates potential peak sales of $1.5 billion or more per indication, implying a valuation of $9 billion against a current market cap of approximately $5 billion. An NDA submission is anticipated in the first half of 2027.
• Axsome Therapeutics (AXSM): Its drug Auvelity, approved for MDD and Alzheimer's agitation, is seeing record prescription growth. Management has guided for $8 billion in peak sales for Auvelity. The company is expected to achieve profitability in the fourth quarter of 2026.
• BridgeBio Pharma (BBIO): The firm is positioned to launch four potential blockbuster drugs. Its treatment Attruby is projected to reach $3 billion to $4 billion in U.S. peak sales. BridgeBio has two upcoming PDUFA dates: November 27, 2026, for BBP-418 and May 8, 2027, for Encaleret. Overall profitability is expected by the third quarter of 2027.

Upcoming Catalysts

Each company faces significant milestones that could impact their valuations. Delphia is preparing for a pre-NDA meeting in Q4 2026, a critical step toward regulatory approval. For Axsome, continued prescription growth and achieving profitability will be key metrics for investors to watch. BridgeBio's upcoming PDUFA dates represent major binary events that could pave the way for its next wave of commercial products.