We recently published a list of the 10 Oversold Pharma Stocks to Buy According to Analysts. In this article, we are going to take a look at where Cytokinetics, Incorporated (NASDAQ:CYTK) stands against the other oversold pharma stocks to buy according to analysts.
On February 20, Emily Field, Head of European Pharma Research at Barclays, appeared on CNBC to discuss the dynamics of the pharmaceutical sector, the impact of US tariffs, and the performance of obesity drugs. She believed the industry may not underperform this year, at least in the first half. However, there are still several questions surrounding the performance of obesity drugs, as major players in the domain have exhibited contrasting previous year performance.
Talking about the tariffs, she said that their materialization poses a big open question for the pharmaceutical sector as some companies assemble their products in the US after manufacturing them abroad. Manufacturing costs are thus pretty low for these companies, which is a significant point to consider when determining the impact of tariffs. She believed that absorbing the additional cost of the tariffs would be very manageable for these companies. The market has reached the tail-end of the earnings season, and the situation hasn’t come up much on earnings calls over this quarter.
We recently talked about what Trump’s tariffs could mean for the healthcare industry in a recently published article on 12 Most Oversold Healthcare Stocks to Buy Now. Here is an excerpt from the article:
“Since more and more companies in the US are looking towards China for deals regarding the next promising molecule, whether in the obesity or cancer space, the impact of tariffs on this ongoing trend has become a subject of significant discussion in the healthcare industry. On February 7, Carlo Rizzuto, Versant Ventures managing director, appeared on CNBC’s ‘Fast Money’ to discuss the impact of tariffs on healthcare. Rizzuto believed that there are two ways in which tariffs could impact the industry. The first would be products innovated in China and brought over to the US or other markets. To understand how the tariffs would affect such trade processes, the industry would have to see how the tariffs are actually structured in the market.
Secondly and more tangibly, China is a massive center for contract research and manufacturing for the US healthcare industry. Therefore, anything that increases that cost is likely to make the market conditions more challenging. The healthcare industry is already under pressure in terms of investor sentiment, and an increase in cost is not going to help its functioning.”
Weight Loss Drugs and the Attention Around Them
Angelica Peebles, CNBC’s Health and Pharma reporter, sat with Eli Lilly’s Chief Scientific Officer to talk about the weight loss sector. From the conversation, she reported that the domain poses opportunity for drugs that are easier to use, such as pills, and medicines that make people lose more weight. Another debate people are having regarding the domain is how much weight loss users need to see on top of what they already have. Drugs delivering around 20% weight loss appear to benefit most of the audience, according to Eli Lilly’s Chief Scientific Officer Dan Skovronsky. He sees more potent drugs that deliver around 25% or more as having a smaller market.
He was further of the opinion that the most exciting thing he has seen in his career as a scientist and physician is how a multitude of diseases can potentially benefit from these weight loss drugs. Right now, their source for this information is the trends they have been seeing in patients’ responses.
Our Methodology
We used stock screeners to compile a list of pharma stocks that experienced significant declines over the past year. We then selected the 10 stocks with the highest analyst upside potential. We also added the number of hedge fund holders for these stocks, as of Q3 2024. The list is sorted in ascending order of analyst upside potential, as of February 21, 2025.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 363.5% since May 2014, beating its benchmark by 208 percentage points (see more details here).
A lab technician using a microscope to examine the biopharmaceutical company’s molecules.
Cytokinetics, Incorporated (NASDAQ:CYTK)
Year Perf: -35.20%
Analyst Upside: 51.97%
Number of Hedge Fund Holders: 61
Cytokinetics, Incorporated (NASDAQ:CYTK) is a biopharmaceutical company that discovers, develops, and commercializes muscle inhibitors to treat diseases that affect muscle performance. It develops small-molecule drug candidates particularly engineered to affect muscle function and contractility. Its clinical-stage drug candidate portfolio includes omecamtiv mecarbil, a novel cardiac myosin activator, CK-136, a novel cardiac troponin activator, reldesemtiv, a novel fast skeletal muscle troponin activator, aficamten, a novel cardiac myosin inhibitor, and CK-3772271, a novel cardiac myosin inhibitor.
The company recently announced its ‘Vision 2030’ plan built on a strong 5-year roadmap focusing on significantly enhancing immediate and future value. A significant component of these plans is the anticipated FDA approval and commercial launch of aficamten (afi) in 2025. The launch of this leading asset holds the potential to bolster Cytokinetics, Incorporated’s (NASDAQ:CYTK) position in the hypertrophic cardiomyopathy (HCM) market.
Cytokinetics, Incorporated (NASDAQ:CYTK) is also financially well-positioned. As of September 30, 2024, it has around $1.3 billion in cash and cash equivalents and investments, which supports the execution of its commercial strategies and pipeline development. The company has plans to continue the go-to-market goals for aficamten in Germany in 2025. Cytokinetics, Incorporated (NASDAQ:CYTK) also aims to expand commercial readiness activities in Europe this year to prepare for the expected approval by the European Medicines Agency (EMA) in H1 2026.
Carillon Eagle Small Cap Growth Fund stated the following regarding Cytokinetics, Incorporated (NASDAQ:CYTK) in its fourth quarter 2023 investor letter:
“Cytokinetics, Incorporated (NASDAQ:CYTK) is a clinical-stage biopharmaceutical company focusing on the discovery and development of therapeutic agents that modulate muscle function for the treatment of diseases and medical conditions. The company reported success in clinical trials for Aficamten, a treatment for symptomatic obstructive hypertrophic cardiomyopathy. Investors are optimistic about the prospects for this medication, which could turn out to be a safer, more effective alternative to the current market leader.”
Overall, CYTK ranks 8th on our list of the most oversold pharma stocks to buy according to analysts. While we acknowledge the potential of CYTK as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than CYTK but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
