Biotech has been a “stock hoarder’s market” – and in accordance with Citi, it could have what it takes to stay one in 2023. “Biotech is now a stock-picking market focused on corporations with short-term catalysts, energetic debates, and powerful fundamentals that would proceed to outperform a wide range of recession scenarios,” Citi said in a December memo. But the ends in the sector will vary depending on the economy. In a foul recession scenario, Citi favors corporations with large money balances which have already commercialized drugs or which can be near drug approval. Citi said some names that fit those criteria include Apellis Pharmaceuticals, Acadia Pharmaceuticals and Amylyx Pharmaceuticals. In line with Citi, the reverse could be true in a gentle recession as investors could be more prone to look for names with low valuations. Nonetheless, it concluded that even in such a scenario, “more mature pipelines with good money balances wouldn’t fall out of favour.” “In an intermediate baseline landing scenario, we assume there could also be some rotation towards safer names with longer money belts, although we’d still expect biotech investors to search out low-cap names with short money belts as interesting high-risk opportunities,” added Citi. The most well-liked picks for 2023 Citi has listed a few of the best picks for the coming 12 months. 1. Beam therapy The bank said its work on sickle cell disease has the potential to provide a superb product. Its preclinical pipeline may “generate long-term value in lots of large market opportunities.” “[Its] a powerful money position makes BEAM attractive even in a “hard landing” scenario, Citi said. The stock price goal was $62, almost 69% up. 2. Apellis Pharmaceuticals Citi said Apellis only must capture a “modest” stock market to succeed in about $2 billion in peak sales, based on the bank’s model. This gave the share price goal at $86, about 73% up. 3. Karuna Therapeutics Karuna has many opportunities to expand its late-stage schizophrenia work, Citi said if successful, top sales could reach $4 billion. “As well as, in a tough landing/recession scenario, interest from long-term investors and generalists may persist as risk-free names with short-term revenue opportunities are favored,” the bank said.