Bank of America has identified two biotech stocks with potential gains of up to 240%, as investors rotate from overvalued tech into more compelling healthcare valuations. The firm's analysts highlight Inhibikase Therapeutics and Wave Life Sciences as top picks, both carrying unanimous Strong Buy ratings from Wall Street analysts. This comes as the Nasdaq Biotechnology Index has surged 30% over the past year, more than double the S&P 500's advance.

Inhibikase Therapeutics (IKT) is developing IKT-001, an oral prodrug of imatinib targeting pulmonary arterial hypertension. The company recently secured FDA clearance to bypass a Phase 2b trial and proceed directly to a pivotal Phase 3 program called IMPROVE-PAH, which could enroll up to 486 patients across 180 global sites. Bank of America analyst Jason Zemansky sees the current $1.76 share price as an attractive entry point, with a $6 price target implying 240% upside. The PAH market, valued at $8.29 billion in 2024, is projected to reach $12 billion by 2030.

Wave Life Sciences (WVE) is advancing RNA-targeting therapies through its PRISM platform, with WVE-007 showing promise in obesity treatment. Phase 1 results demonstrated significant reductions in visceral and total body fat with a single 240 mg dose. The company is also developing WVE-006 for alpha-1 antitrypsin deficiency. Analyst Alec Stranahan views Wave's obesity program as a central upside driver, comprising 56% of his price objective.