Citi is so bullish on one biotech firm that it has given its shares a goal price that represents around 800% upside. That company is U.S.-listed Biomea Fusion , which develops covalent therapies to treat cancers and metabolic diseases. These therapies offer “a variety of potential benefits over conventional non-covalent drugs including greater goal selectivity, lower drug exposure and the flexibility to drive a deeper, more durable response,” the corporate says. In a Nov. 22 note, Citi gave the stock a buy rating and a price goal of $90, representing potential upside of around 818% from Tuesday’s price. Nonetheless, the bank cautioned that the stock is high risk, given the “typical volatility” of biotech stocks and uncertainty related to clinical trials. Citi noted that Biomea’s initial data from its trial for a sort 2 diabetes treatment — called BMF-219 —exceeded the bank’s expectations. Citi predicts a 65% probability of success for that trial, with $1.9 billion in risk-adjusted U.S. sales by 2035. Beyond diabetes, Biomea is also testing the treatment on leukemia and other cancers. Biomea shares are around 18% higher year-to-date. Citi is not alone in its bullishness on the corporate. In response to FactSet, analysts covering the stock give it average price goal upside of 385% and a buy rating of 88%. On FactSet, the very best estimate got here from Oppenheimer, which supplies it potential upside of over 600%. Outlook for biotech The biotech sector has faced headwinds since early 2022, as macroeconomic uncertainty, regulatory overhangs, and rapidly rising rates of interest weigh, noted BMO Capital Markets in a Nov. 16 note. “Despite underperformance of the XBI, we see significant opportunity for investors to comprehend gains over the subsequent 6-12 months,” said BMO, referring to the SPDR S & P Biotech ETF . The investment bank said it expects outperformance in biotech to be driven by flattening or declining rates of interest “disproportionately benefiting high duration Biotech,” and other high-profile catalysts. “The speed and degree of rate of interest increases have likely been essentially the most influential think about Biotech fluctuations, and any slowing in rate increases or reductions could rally the sector (especially in SMID-Biotech),” said BMO, referring to small and medium-sized biotech firms. Growth firms akin to biotech and tech are more sensitive to any fluctuating costs of borrowing. — CNBC’s Michael Bloom contributed to this report.