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• Wells Fargo said competition down the line could limit the long-term commercial potential of its therapy for treatment-resistant depression.
• The firm initiated Helus Pharma with an ‘Overweight’ rating and a $16 price target, a near 100% upside potential from current levels.
• Wells Fargo forecasts more than $7 billion in peak sales for Madrigal Pharmaceuticals’ Rezdiffra.

Wells Fargo initiated coverage on five biotechnology companies, expressing optimism on several late-stage drug developers focused on depression therapies, including Helus Pharma (HELP), GH Research (GHRS), and Definium Therapeutics (DFTX), while taking a more cautious stance on Compass Pathways (CMPS).

Compass Could Face Competitive Challenges

According to The Fly, Wells Fargo initiated Compass Pathways with an ‘Equal Weight’ rating and a $13 price target, implying a 12% upside potential from current levels. CMPS stock was up 2.6% at the time of writing.

Analyst Benjamin Burnett said the company’s COMP360 therapy for treatment-resistant depression is likely to meet the U.S. Food and Drug Administration’s (FDA) approval standard after two positive Phase 3 studies. The latest trial, reported in February 2026, showed that two 25 mg doses of COMP360 delivered a statistically significant and clinically meaningful reduction in depression symptom severity, measured by the Montgomery–Åsberg Depression Rating Scale (MADRS), compared with the 1 mg dose.

However, he noted that the treatment’s efficacy appears comparable to Johnson & Johnson’s Spravato, while competition from follow-on therapies could limit its long-term commercial opportunity.

Retail sentiment for CMPS on Stocktwits turned ‘bearish’ from ‘neutral’ a day earlier. The stock has seen strong buying interest so far this year, gaining more than 76%.

HELP Stock Has Attractive Risk/Reward Profile Ahead Of Phase 3 Results

Wells Fargo initiated Helus Pharma with an ‘Overweight’ rating and a $16 price target, a near 100% upside potential from current levels.

The firm thinks COMP360 data provide validation for Helus’ HLP003 in treatment-resistant depression. HELP stock was up around 5% at the time of writing.

Last week, Helus Pharma completed enrollment in its Phase 3 Approach Trial evaluating HLP003 in adults with moderate to severe major depressive disorder who have not responded adequately to antidepressants. The company expects to report Phase 3 results in the fourth quarter.

The firm sees an attractive risk-reward profile for the shares ahead of the topline results.

Retail sentiment on Stocktwits turned ‘extremely bullish’ from ‘bullish’ a day earlier, amid ‘extremely high’ message volumes. The stock has shed roughly 3% so far this year.

Wells Fargo Is Bullish On GH Research Despite Investor Skepticism

The firm started GH Research with an ‘Overweight’ rating and a $44 price target, implying a 56% upside potential from its current levels. GHRS stock is up around 3.2%.

In June, the company reported results of a Phase 2a trial for postpartum depression. The treatment met its primary endpoint, reducing depression scores by an average of 35.4 points by Day 8. The treatment was well tolerated, with no serious adverse events or treatment-related suicidal thoughts or behavior.

Despite an over 12% increase in the stock price since then, Wells Fargo said the current valuation suggests investors remain unconvinced that the company’s encouraging Phase 2b depression data will be replicated in Phase 3 trials.

The stock has gained more than 112% so far this year, while its retail sentiment on Stocktwits turned ‘neutral’ from ‘bullish’ a day earlier.

Definium Therapeutics Is Riding The Psychiatry Trend

Wells Fargo also started coverage of Definium Therapeutics with an ‘Overweight’ rating and a $68 price target, indicating a 51% upside potential. The stock is currently up around 4%.

The firm believes Spravato has validated the interventional psychiatry model for treating depression, creating room for new therapies.

Definium’s lead candidate, DT120, met the primary endpoint in its Phase 3 Emerge trial in adults with major depressive disorder. Patients treated with DT120 saw a 13.3-point reduction in depression scores at six weeks, compared with a 5.2-point reduction in the placebo group. Wells Fargo believes the company is well positioned to benefit from growing demand for innovative mental health treatments.

DFTX shares have gained more than 240% so far this year, while retail sentiment on Stocktwits has remained in the ‘bearish’ territory over the past 24 hours.

Madrigal’s Rezdiffra Has A Multi-billion-Dollar Sales Potential

The firm launched coverage of Madrigal Pharmaceuticals with an ‘Overweight’ rating and a $685 price target, representing a 22% upside potential, while its stock is currently up around 3%.

Wells Fargo forecasts more than $7 billion in peak sales for Rezdiffra, its lead medication to treat noncirrhotic metabolic dysfunction-associated steatohepatitis (MASH) with moderate to advanced liver fibrosis.

The firm also added that physician surveys indicate concerns about GLP-1 drugs and competitive pressures are overstated, supporting durable growth in what it expects to be a ‘multi-drug market.’

Retail sentiment surrounding MDGL turned ‘bullish’ from ‘neutral’ a day earlier. The stock is down around 6% so far this year.

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