President Trump’s newly announced tariff policy has done more than just push the stock markets deeper into correction territory — the sudden panic on Wall Street has increased worries about a full-blown recession hitting in the near future. According to USA Today, several big banks are putting the chance of a recession at 40% or higher.
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Only time will tell if we dip into recession. For now, worried investors are seeking ‘recession-proof’ stocks to shore up their portfolios. The biopharma team at RBC has some concrete suggestions on this front.
“With recently-announced tariffs and other macro developments, we have been receiving more questions from investors on how to position for a potential recession, and whether biopharma is in fact a defensive sector,” RBC’s biotech team noted.
RBC crunched over three decades of data and found that large-cap biotech stocks have consistently held up during economic downturns — with a median downside of just 1% across major negative economic events. Even more encouraging, they believe selective mid-cap biotech names offer real upside potential when the market rebounds.
To back up their thesis, RBC followed up with actionable recommendations — pinpointing specific healthcare stocks that could offer both protection and potential. We’ve used the TipRanks database to look up the broader Wall Street view on two of them. Let’s take a closer look.
Axsome Therapeutics(AXSM)
We’ll start with Axsome Therapeutics, a biotech research company that is developing new therapeutic agents for central nervous system (CNS) conditions. Diseases of the CNS are difficult on both patients and caregivers; they frequently resist treatment, and many CNS diseases lack any effective therapies. While this makes research into the field difficult, it also makes for a rich field of research targets. And Axsome has proven adept at hitting those targets.
For research-oriented biopharma companies, getting a new drug approved and on the market is akin to the Holy Grail – and Axsome has three of these on the market. The company’s first product to receive FDA approval was Sunosi, a prescription medication used in the treatment of excessive daytime sleepiness. In May 2022, Axsome bought the rights to Sunosi from Jazz Pharmaceuticals, after Sunosi had already been approved by the FDA in 2019.The drug has been found useful in the treatment of narcolepsy and obstructive sleep apnea, and is described as an orally dosed wakefulness-promoting therapeutic agent.
Next on the list is Auvelity, which was approved by the FDA in August of 2022 as a treatment for major depressive disorder (MDD) in adults. The drug, which is the first oral NMDA receptor agonist approved as an MDD treatment, is notable as the first depression therapy in 60 years to introduce a new mode of action.
Finally, in January, Axsome announced that the FDA had approved Symbravo, a new treatment for migraine headaches. The drug was launched in February as a treatment for migraines, with or without an aura, in adults. Symbravo is a combination tablet, taken once daily.
On the financial side, Axsome’s three marketable products are its prime revenue generators. It’s still too early for quarterly sales numbers on Symbravo – but both Auvelity and Sunosi showed strong revenue growth in 2024, per Axsome’s 4Q24 earnings report. Auvelity’s full-year revenue came to $291.4 million, up an impressive 124% year-over-year, while Sunosi’s $94.3 million in revenue represented sound y/y growth of 26%. Overall, Axsome saw net product revenue of $385.7 million last year, up 88% from 2023.
In addition to its stable of marketable products, Axsome has a solid pipeline of drug candidates. Notable among these is the company’s Alzheimer’s Disease program. Drug candidate AXS-05 is at the late clinical stages, and earlier this month the company announced positive results from the Phase 3 ACCORD-2 trial of AXS-05 in the treatment of agitation due to Alzheimer’s. Last month, on March 3, the company announced that it had received from the FDA the formal pre-New Drug Application meeting minutes, an important step on the path to submitting the supplemental NDA. The sNDA submission for AXS-05 is planned for 3Q25.
Despite the market losses of recent trading sessions, Axsome’s stock has gained 34% over the past 12 months, and is up 15% for the year-to-date while AXSM still boasts a market cap of $4.8 billion.
That market cap, along with several other factors, informs RBC’s Leonid Timashev’s bullish take here. He writes of Axsome, “We believe AXSM’s profile suggests the company should recover well in the event of a recession given their market cap, three commercial products, and a growing revenue base. Further, with their lead drug positioned to treat depression (we note economic decline is often also associated with increased rates of mental health issues in the population), we believe demand should continue to grow in the near-term. We believe Auvelity can deliver $500M in 2025 sales, and regulatory catalysts in 2H25 (AD agitation filing) and 2026 (potential AD agitation approval) can provide an opportunity for shares to inflect.”
Timashev goes on to rate AXSM as Outperform (i.e., Buy), with a $190 price target that points toward a one-year upside potential of 95%. (To watch Timashev’s track record, click here)
There are 18 recent analyst reviews on record for Axsome, and they are unanimously positive for a Strong Buy consensus rating. The stock’s $97.55 trading price and $175.87 average target price together imply a gain of 80% in the next 12 months. (See AXSM stock forecast)
Alnylam Pharma (ALNY)
The second stock we’ll look at here is another biotech/biopharma, Alnylam. This company is focused on RNAi therapeutics, that is, RNA interference drugs used in the treatment of genetically-based diseases. Alnylam was a pioneer in the field of RNAi, and has used the approach to develop a new class of medications that treat diseases by silencing the causative genes. RNAi selectively targets and prevents specific proteins, the physical form of gene expression, from being made, effectively stopping disease conditions where they begin.
Like Axsome above, Alnylam has several approved drugs on the market. The first of these to reach commercialization was Onpattro, which received its FDA approval in 2018, . This drug was designated as ‘first-in-class,’ and is used as a treatment for polyneuropathy caused by hereditary transthyretin-mediated amyloidosis (hATTR amyloidosis) in adult patients.
Alnylam followed this in 2019, with the approval of Givlaari for the treatment of acute hepatic porphyria, also in adult patients. This condition affects the production of heme, which helps to bind oxygen in the blood. Patients suffer from the buildup of porphyrin molecules, which are a toxic byproduct of heme production. Givlaari targets the delta-aminolevulinate synthase 1 (ALAS1) enzyme, which is involved in producing heme.
In 2020, Alnylam received FDA approval of Oxlumo, the first therapy on the market to lower urinary oxalate levels as a treatment for primary hyperoxaluria type 1 (PH1). The drug is a subcutaneous injection, and is available for both adult and pediatric patients.
Next, in 2022, the Alnylam drug Amvuttra was approved. This drug is an RNAi therapeutic agent designed for the treatment of the polyneuropathy of hereditary transthyretin-mediated (hATTR) amyloidosis. This condition prevents the proper expression of the transthyretin (TTR) gene, resulting in TTR buildup that causes nerve damage. In addition, Alnylam announced this past March that its supplemental NDA for Amvuttra, in the treatment of cardiomyopathy of wild-type or hereditary transthyretin-mediated amyloidosis (ATTR-CM) in adults, has also received FDA approval. This approval gives Amvuttra an expanded indication, and makes it the only approved drug on the market to treat both ATTR-CM and the polyneuropathy of hereditary transthyretin-mediated amyloidosis (hATTR-PN) in adult patients.
The most recent approved drug in Alnylam’s lineup is Qfitlia, the approval of which was announced this past March 28. This drug is the first RNAi treatment approved for the treatment of hemophilia A or B. The approved indication of the drug is described as “routine prophylaxis to prevent or reduce the frequency of bleeding episodes in adult and pediatric patients 12 years of age and older with hemophilia A or B, with or without factor VIII or IX inhibitors.” Alnylam has been developing and commercializing Qfitlia in partnership with Sanofi.
Qfitlia is Alnylam’s second partnership project. The company previously developed Leqvio, a treatment for high cholesterol, as a partnership project with Novartis.
On the financial side, Alnylam’s 4Q24 report showed that the company generated $593.17 million in total revenue during the quarter, for a 35% gain year-over-year – and beat the forecast by $12.55 million. At the bottom line, Alnylam recorded a quarterly net loss in Q4 of 65 cents per share, missing the estimates by 6 cents per share.
A biotech with a solid line-up of approved products will always get attention from the analysts, and RBC’s Luca Issi has been following Alnylam. Issi is impressed by the approved drugs, the partnership programs, and the recently expanded indication on Amvuttra. He also sees potential in the firm’s development pipeline, and writes of the company, “We believe ALNY’s profile suggests the company could both act as a safe haven and recover well in the event of a recession given their market cap ($30 billion), four commercial products (plus two approved partnered products), and a $2.5b revenue stream anticipated to almost double over the next 3 years. Further, with their lead drug recently approved to treat TTR-CM (a relatively large prevalence pool of ~350k patients, but only 20% on treatment today) we believe demand should continue to grow in the near-term. We believe the TTR franchise can deliver $1.7b in 2025 sales, and the rest of the pipeline (AGT readout 2H25, next-gen TTR phase III start, initiation of obesity studies) can provide an opportunity for shares to inflect.”
For Issi, this adds up to an Outperform (i.e., Buy) rating, which he supports with a $330 price target, implying an upside of 47% on the one-year horizon. (To watch Issi’s track record, click here)
Overall, this stock gets a Strong Buy consensus rating, based on 22 recent reviews that include 18 to Buy and 4 to Hold. The shares are priced at $224.32 and their $323.33 average target price suggests that the stock has a one-year upside potential of 44%. (See ALNY stock forecast)
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Disclaimer: The opinions expressed in this article are solely those of the featured analysts. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
