Growth stocks, particularly those in the biotech sector, can be lucrative long-term investments. The biotech sector often develops cutting-edge treatments (like gene therapy, immuno-oncology, and obesity drugs) that have the potential to redefine the healthcare industry.  Shares of companies in the clinical stage can skyrocket in a short period of time following the success of a clinical trial or FDA approval. 

However, these stocks also carry high risk, as their performance is heavily reliant on innovation, clinical trial success, and regulatory approval. Here are two “Strong Buy”-rated biotech growth stocks with potential upside of more than 200% that Wall Street believes are worth the risk.

Growth Stock #1: Celldex Therapeutics

With a market cap of $1.2 billion, Celldex Therapeutics (CLDX) is a clinical-stage biopharmaceutical company focused on developing monoclonal and bispecific antibody therapies to treat severe inflammatory, allergic, autoimmune, and other life-threatening diseases.  The company has several promising candidates in its pipeline, the most advanced of which is barzolvolimab.

Celldex stock has fallen 21.3% so far this year. Nonetheless, analysts believe the stock has the potential to rally as much as 213% over the next 12 months, based on the average price target of $62.38.

Celldex's lead candidate is barzolvolimab, a monoclonal antibody that targets KIT, a receptor tyrosine kinase found in a variety of inflammatory diseases. The drug is currently undergoing Phase 3 clinical trials for chronic spontaneous urticaria (CSU). This year, the drug will be tested in a separate Phase 3 trial for chronic inducible urticaria (CIndU). It is currently being tested in phase 2 clinical trials for prurigo nodularis (PN), eosinophilic esophagitis, and atopic dermatitis. The biotech's other notable candidate is CDX-622, which is Celldex's first bispecific antibody candidate targeting inflammatory pathways, and is currently in a Phase 1 trial. 

The company had $673.3 million in cash, cash equivalents, and marketable securities at the end of the first quarter, which it believes will be sufficient to fund its operations until 2027. As a clinical-stage company, the company reported a net loss of $0.81 per share, which exceeded analysts' expectations for a $0.74 loss per share in Q1. The increased net loss was primarily caused by higher research and development (R&D) costs associated with the advancement of its lead candidate, barzolvolimab.

Celldex's lead candidate aims to treat a variety of inflammatory conditions. While the company faces challenges, including clinical and regulatory hurdles, its strong cash position and diverse pipeline position it for future growth, which is probably why analysts are so bullish about the stock.  Recently, Morgan Stanley and TD Cowen analysts reiterated their “Buy” ratings on the stock, citing its strong financial position and promising clinical developments.

Overall, on Wall Street, Celldex stock is a “Strong Buy.” Out of the 15 analysts covering CLDX, 13 rate it a “Strong Buy,” and two rate it a “Hold.” The average target price of $62.38 suggests the stock has an upside potential of 213% above current levels. The high target price of $90 implies a potential upside of 351% over the next 12 months. 

Growth Stock #2: Viking Therapeutics

Valued at $3.09 billion, Viking Therapeutics (VKTX) is a clinical-stage biopharmaceutical company that develops therapies for metabolic and endocrine disorders. Viking stock has been highly volatile. After a massive 116% gain last year, the stock has fallen 29.3% year-to-date, compared to the broader market's 0.9% pullback.

Viking's most notable program is VK2735 for obesity, a dual GLP-1/GIP receptor agonist designed to mimic hormones that regulate appetite and blood sugar levels. The drug is being developed in both injectable and oral forms to address the growing obesity treatment market. VK2735 demonstrated positive results in Phase 2 trials, and Phase 3 trials are scheduled for the second quarter of 2025. Furthermore, to support the commercialization of VK2735, Viking has signed a manufacturing agreement with CordenPharma. This agreement secures the supply of both the active pharmaceutical ingredient and the finished product, addressing concerns about ramping up production if and when the drug is approved. 

Its pipeline also includes  VK2809, an orally available thyroid hormone receptor beta agonist that is currently in Phase 2b clinical trials for the treatment of non-alcoholic steatohepatitis (NASH) and non-alcoholic fatty liver disease. Additionally, VK0214, an investigational drug for X-linked adrenoleukodystrophy (X-ALD), is in Phase 1b clinical trials. 

In the obesity market, Viking faces stiff competition from two pharmaceutical behemoths, Novo Nordisk (NVO) and Eli Lilly (LLY). These companies have established obesity treatments on the market. However, Viking's candidate VK2735 offers a potential advantage with its oral formulation, which may appeal to patients who prefer pills over injections.

According to a MarketWatch report, William Blair analysts believe that this agreement could result in 6.5 million patient doses per year, potentially generating $39 billion in revenue. Analysts also believe that its financial stability supports a strong pipeline with numerous growth opportunities. At the end of the most recent quarter, the company had $852 million in cash, cash equivalents, and short-term investments to fund its strong pipeline. 

Viking Therapeutics is currently in the clinical stage, which means that it does not yet generate revenue from product sales. In the first quarter of 2025, the company reported a net loss of $0.41 per share, which was wider than the previous year's loss of $0.26 per share and the estimated loss of $0.31 per share. The increase in net losses was due to a $17.3 million increase in R&D expenses during the quarter. 

Overall, on Wall Street, Viking stock is a “Strong Buy.” Of the 18 analysts covering the stock, 16 rate it a “Strong Buy,” and two say it is a “Hold.” The average target price of $90.12 suggests the stock has an upside potential of 213.5% above current levels. VKTX's high target price of $125 implies a potential upside of 334.8% over the next 12 months. Viking stock more than doubled in 2024, driven by positive clinical outcomes, so these upsides don’t seem unattainable.