Biotechnology stocks attracted unprecedented investor interest throughout 2020 due to the development of vaccines and therapies for COVID-19. Historically, biotech stocks advance when there is a possibility of developing a new drug or vaccine for a rare or chronic disease. So, not surprisingly, the development of the coronavirus vaccine has instilled optimism among investors that the sector will soon deliver cures for other rare diseases. This is in part why biotech stocks have rallied over the past year, and we believe the momentum will continue this year.
The biotech sector is developing innovative therapies for fatal ailments like cancer, kidney failure, human immunodeficiency virus (HIV) infection, and fibrotic conditions. Much research is currently being conducted to find cures for such diseases. There have also been significant developments in the sector in the form of collaborations, external investments, positive government policies, and FDA approvals. Small and large biotech companies are also seeking growth through mergers and acquisitions. According to Global Market Insights, the rare disease treatment market is likely to grow beyond $317 billion by 2026.
Gilead Sciences, Inc. (GILD), Seagen, Inc. (SGEN), and Genmab A/S (GMAB) are well-positioned to benefit from this growth phase we believe. They are collaborating with global players and working to find therapies for life-threatening diseases. Their stocks have performed well over the past year and we think the uptrend is likely to continue.
Gilead Sciences, Inc. (GILD)
GILD is a research-based biopharmaceutical company involved in discovering, developing, and commercializing medicines for rare diseases globally. Biktarvy, Descovy, Stribild, Complera/Eviplera, and Truvada are some of the products the company delivers. GILD manufactures medicines primarily for viral diseases, inflammatory and fibrotic diseases, oncology, and human immunodeficiency virus (HIV) infection.
GILD and Gritstone Oncology, Inc. (GRTS) have announced a collaboration, option and license agreement to research and develop a vaccine-based immunotherapy for HIV infections. The vaccine would use GRTS’s proprietary prime-boost vaccine platform, alongside mRNA (SAM) and adenoviral vectors, with antigens developed by GILD.
During the fourth quarter ended December 31, 2020 the company’s product sales climbed 26.2% year-over-year to $7.4 billion. Its EPS for the quarter fell to $1.23 from $2.12 posted in the same period last year.
A consensus revenue estimate for the quarter ended March 31, 2021 was $6.4 billion, representing a 14.7% increase year-over-year. Meanwhile, its EPS is likely to grow 8.9% to $1.83.
Over the past year, GILD saw a 2.8% retreat to end yesterday’s trading session at $653.86. Over the past six months, the stock declined 10.1%.
It is no surprise that GILD has an overall rating of A, which equates to Strong Buy in our POWR Ratings system. The POWR Ratings are calculated by considering 118 different factors with each factor weighted to an optimal degree.
GILD has a grade of A for Value, and B for Momentum and Quality. In the 478-stock in Biotech industry, it is ranked #4.
Click here to see the additional POWR Ratings for GILD (Growth, Stability and Sentiment)
Seagen, Inc. (SGEN)
SGEN is a biotechnology company that is primarily developing and marketing an innovative cancer treatment that leverages monoclonal antibody-based therapies. Adcetris, Padcev, and Tukysa are among the drugs that the company formulated. In October, Merck made a $1billion investment in SGEN. SGEN is also eligible to receive up to $850 million based on hitting development milestones and $1.75 billion based on sales milestones. SGEN has also received positive data from Phase 2 PADCEV clinical trials to support global registration applications.
During the third quarter ended September 30, 2020, its total net product sales climbed 60% over the year earlier period to $267.5 million. Its EPS for the quarter was $3.65 compared to a loss per share of $0.55 posted in the same period last year. Analysts expect revenue for the quarter ended December 31, 2020 to be $586.6 million, representing 102.4% year-over-year growth. Its EPS is likely to grow at the rate of 236.6% per annum over the next five years.
SGEN climbed 50.1% during the past year to close yesterday’s session at $165.42. Over the past six months, the stock declined 3.5%.
SGEN’s strong fundamentals are reflected in its POWR Ratings. The POWR Ratings are calculated by considering 118 different factors with each factor weighted to an optimal degree.
The stock has an overall rating of A, which equates to Strong Buy in our proprietary rating system. SGEN has a grade of A for Growth, and B for Momentum, Quality, Sentiment, and Value. Of the 478 stocks in the Biotech industry, it is ranked #2.
In addition to the POWR Ratings grades I have just highlighted, you can see SGEN’s ratings for Stability, here."
Genmab A/S (GMAB)
GMAB is an international biotechnology company that develops human antibody therapeutics to treat cancer and other diseases. The company is based out of Denmark and its portfolio includes two products, daratumumab, which is marketed as DARZALEX, and ofatumumab, which is marketed as Arzerra. DARZALEX is used for the treatment of certain symptoms of multiple myeloma, while Arzerra is used to cure certain symptoms of chronic lymphocytic leukemia.
GMAB has received a $40 million milestone payment in its collaboration with AbbVie. This followed the first patient to be treated in the Phase 3 study of subcutaneous epcoritamab versus chemotherapy in patients with relapsed or refractory diffuse large B-cell lymphoma (DLBCL).
GMAB’s revenue for the first nine months ended September 30, 2020 surged 235% year-over-year to DKK 8.1 billion, driven by the upfront payment from AbbVie and higher DARZALEX royalties. The company’s Janssen and European Myeloma Network saw positive results from a Phase 3 APOLLO study of daratumumab in relapsed or refractory multiple myeloma. Its EPS for the quarter fell to DKK 8.04 from DKK 8.28 posted in the same period last year.
Analysts expect GMAB’s revenue for the quarter ended December 31, 2020 to be $303.9 million, representing a 30.8% decline year-over-year. Its EPS is likely to grow at the rate of 27% per annum over the next five years.
GMAB ended yesterday’s trading session at $ 40.17, gaining 69.2% over the past year. During the past six months, GMAB climbed 11%.
GMAB’s strong fundamentals are reflected in its POWR Ratings. The POWR Ratings are calculated by considering 118 different factors with each factor weighted to an optimal degree.
The stock has an overall rating of B, which equates to Buy in our proprietary rating system. It has a grade of B for Quality, Momentum, and Value. It is ranked #12 in the Biotech industry.
In total, we rate GMAB on eight different levels. Beyond what we stated above, we also have given FORM grades for Growth, Stability, and Sentiment. Get all GMAB ratings here.
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GILD shares were trading at $67.40 per share on Friday afternoon, up $1.57 (+2.38%). Year-to-date, GILD has gained 15.69%, versus a 3.70% rise in the benchmark S&P 500 index during the same period.
About the Author: Namrata Sen Chanda
Namrata is an accomplished financial journalist, with nearly a decade of experience. She specializes in interpreting news releases and framing investment strategies, and has worked with some of the leading companies in real estate, banking, insurance, mutual funds, financial research, fintech, and investment education.3 Top Biotech Stocks to Buy in February appeared first on StockNews.com