How can we know just where the markets are heading? The new year started with an upward trend that nearly got derailed by a flashmob from Reddit – and suddenly we’re dealing with a rise in volatility. Covering the markets for Canaccord, Chief Market Strategist Tony Dwyer believes that the «extraordinary liquidity from corporate bond and equity new issuance, an ultra-friendly Fed, and further fiscal stimulus suggests any weakness – even if sharp – should prove temporary and be used as opportunity to ramp risk exposure.” If Dwyer is right, then the key now is finding the best opportunities. Some of his colleagues at Canaccord are zeroing in on biotech stocks. These names offer investors a combination of high risk and high reward – if a new drug candidate should prove successful, the profit potential rise dramatically in a short time. Conversely, one mishap can send shares crashing. We’ve used the TipRanks database to pull up the details on two clinical-stage pharma companies that Canaccord’s analysts have tagged as likely winners – with the potential to double or more in value in the coming year. Cortexyme, Inc. (CRTX) The first Canaccord pick we’re looking at is Cortexyme, a clinical-stage drug developer researching treatments for degenerative diseases such as Alzheimer’s. The key point for investors in the Cortexyme story is the GAIN study. This is a Phase 2/3 study featuring drug candidate COR388, named atuzaginstat, a novel small-molecule lysine gingipain inhibitor, as a treatment for Alzheimer’s. The study follows 643 patients; the interim analysis, looking at the record of 300 of those patients, concluded in December with positive results, recommending that the full 1-year study continue as planned to final analysis. Investors, however, were hoping the trial would stop earlier for futility or overwhelming efficacy and, in reaction, sent the stock tumbling as news broke. Ahead of the top-line data read out, which is expected in 4Q21, Canaccord analyst Sumat Kulkarni believes that now is the time to pull the trigger. “Given the significant unmet need and market opportunity in AD, the final GAIN pivotal trial readout remains the most important 2021 event for CRTX that investors are tuned into… We continue to assume a 20% probability of approval for atuzaginstat and a 15% discount rate in our discounted cash flow (DCF) valuation… We assume a potential launch in 2025E and unadjusted peak sales of $9.1bn in 2031E,» the 5-star analyst noted. To this end, Kulkarni rates CRTX a Buy, which is strongly supported by a $75 price target. This figure suggests a 108% upside in the coming year. (To watch Kulkarni’s track record, click here) Overall, over the past three months alone, «buy» ratings have outnumbered «sells» four-to-one on CRTX, and the average target price on Wall Street is $96. Assuming the analysts are right about that, investors in CRTX today stand to rake in ~166% profit over the next year. (See CRTX stock analysis on TipRanks) Black Diamond Therapeutics (BDTX) Next up, Black Diamond, is a drug company researching cancer treatments. Black Diamond focuses on genetically defined cancers with limited treatment options, and uses a proprietary tech platform, mutation-allostery-pharmacology, to develop small molecule therapies that will target specific mutations in a tumor agnostic manner. The company’s pipeline features two drug candidates at present, with the lead candidate, BDTX-189, in a Phase 1 study that is scheduled for completion in the first half of this year. BDTX-189 is showing promise in combatting allosteric EGFR and HER2 tumors, while minimizing potential toxic effects. That point could turn out to be key, as most current cancer treatments come with severe side effects. Black Diamond is continuing to enroll patients in the BDTX-189 study, in preparation for moving to Phase 2 later this year. The MasterKey-01 dose escalation study has progressed well, and defined a maximum tolerated dose within the company’s predictions. Covering BDTX for Canaccord, 5-star analyst Arlinda Lee noted, “We continue to expect first clinical data presentation data for lead MAP platform drug candidate BDTX-189, an inhibitor of allosteric ErbB mutations, at ASCO and initiation into Ph2 expansion cohorts mid-21. We view BDTX’s unique approach of identifying allosteric driver mutations, targeting families of mutations with a single small molecule inhibitor, and tumor-agnostic development strategy as attractive.» Given all of the above, Lee stays with the bulls. In addition to a Buy rating, the analyst puts a $50 price target on the stock. Investors could be pocketing a gain of 106%, should this target be met in the twelve months ahead. (To watch Lee’s track record, click here) Wall Street’s analysts can be a contentious lot – but when they agree on a stock, it’s a positive sign for investors to take note. That’s the case here, as all of the recent reviews on Black Diamond are Buy-side, making the consensus rating a unanimous Strong Buy. The analysts have given an average price target of $51.50, slightly more bullish than Lee’s above, and indicating a 112% upside from the current share price of $24.31. (See BDTX stock analysis on TipRanks) To find good ideas for biotech stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights. 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.