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Investing.com -- Citi has expanded its biopharmaceutical research coverage, initiating coverage on seven small- and mid-cap (SMid) biotechnology companies. Citi said SMid biotechs remain an attractive alternative to large-cap pharmaceutical firms, particularly amid healthcare policy uncertainties.

Citi initiated coverage with Buy ratings on 89bio (NASDAQ:ETNB), price target $25. Apogee (NASDAQ:APOG), price target $95. Avidity, price target $70, BioNTech (NASDAQ:BNTX), price target $145. Kiniksa, price target $40. Kymera, price target $52

Brokerage maintains a Sell rating on PTC (NASDAQ:PTC) Therapeutics (NASDAQ:PTCT) while raising its price target to $50 from $46.

Despite near-term volatility, Citi favors a “barbell” strategy, balancing exposure between high-growth large caps like Eli Lilly (NYSE:LLY.N) and Vertex Pharmaceuticals (NASDAQ:VRTX.O) with catalyst-driven SMid biotechs.

Citi remains bullish on SMids as an option for investors looking to diversify away from tech/AI and consumer weakness during times of high economic uncertainty. 

Among the newly covered stocks, Citi named Apogee, Avidity, and Kymera as its preferred SMid biotechs, citing their focus on unmet medical needs and differentiated research platforms.

Moderna (NASDAQ:MRNA) received a Neutral rating with a $40 price target.

Citi said SMid biotech sentiment has been more challenged than expected in early 2025, largely due to investor focus on tariffs, DOGE oversight, and macroeconomic uncertainties. However, the bank sees a potential rebound in capital markets activity in the second half of the year.

M&A activity could also provide a boost to SMid biotechs, Citi noted, with early 2025 already seeing 12 deals valued at approximately $20 billion.

Citi highlighted potential regulatory and clinical milestones as it started coverage with BioNTech expecting phase 1/2a data for BNT323 by year-end, potentially supporting a 2025/26 regulatory submission.

Moderna’s phase 3 study for its cytomegalovirus vaccine, mRNA-1647, could yield final efficacy data by the end of 2025.

Avidity plans a Biologics License Application (BLA) submission for del-zota in Duchenne muscular dystrophy in late 2025.

89bio anticipates phase 3 data for its lead candidate, pegozafermin, in metabolic dysfunction-associated steatohepatitis (MASH) by 2027.

Apogee and Kymera expect mid- to late-stage clinical trial data later in 2025.

Citi maintained a cautious stance on Moderna, citing policy volatility around vaccines and near-term reliance on its respiratory vaccine franchise.

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