Biotech companies are currently focused on developing viable drugs, therapies and medical diagnostics tests to treat critical diseases and serious ailments through tech integration. Investors have been betting on the biotech space to reap substantial returns over the long term, given the aging population and inelastic demand for medication. This is evidenced by the iShares Nasdaq Biotechnology ETF’s (IBB) 7.7% returns over the past month versus the SPDR S&P 500 Trust ETF’s (SPY) 1.8% gains.
With biotech companies leveraging next generation technology and genome mapping methods to revolutionize healthcare, the global biotechnology market is expected to grow at a 15.5% CAGR to hit $850.50 billion by 2027.
Therefore, we believe the shares of fundamentally sound biotechnology stocks Amgen Inc. (AMGN), Gilead Sciences Inc. (GILD), Illumina, Inc. (ILMN), and Regeneron Pharmaceuticals, Inc. (REGN) have the potential to continue soaring.
Amgen Inc. (AMGN)
AMGN is a biotechnology company that discovers, develops, manufactures, and delivers human therapeutics for the treatment of serious illness in the areas of oncology/hematology, cardiovascular disease and neuroscience. The company distributes its products through pharmaceutical wholesale distributors and direct-to-consumer channels. AMGN is based in Thousand Oaks, Calif.
This month, the Japanese Ministry of Health, Labor and Welfare granted marketing approval for AMGN’s Aimovig for the suppression of migraine attacks in adults. Aimovig is the first and only approved treatment in Japan to block the calcitonin gene-related peptide receptor (CGRP-R), which is believed to play a critical role in migraine. This approval should enable AMGN to expand its market reach in the coming months.
On June 1, AMGN and Kyowa Kirin Co.,Ltd. announced an agreement to jointly develop and commercialize KHK4083, which is Kyowa Kirin’s Phase 3-ready anti-OX40 fully human monoclonal antibody for the treatment of atopic dermatitis, with potential in other autoimmune diseases. Both companies hope to generate good sales from the commercialization of KHK4083 in various global markets.
For its fiscal year 2021 second quarter, ended March 31, AMGN’s operating income has increased 5% sequentially to $2.86 billion. The company had $6.11 billion in cash and cash equivalents as of March 31, 2021.
AMGN surpassed the Street’s EPS estimates in three of the trailing four quarters. A $6.43 billion consensus revenue estimate for the current quarter, ending June 30, 2021, represents a 3.5% rise from the prior-year period. The stock’s EPS is expected to grow at a 6.4% rate over the next five years. It has climbed 6.9% over the past six months to close yesterday’s trading session at $242.46.
AMGN’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall B rating, which equates to Buy in our proprietary rating system. The POWR Ratings are calculated by considering 118 different factors, with each factor weighted to an optimal degree.
The stock has an A grade for Quality, and a B grade for Value and Stability. To see additional POWR Ratings for AMGN’s Growth, Sentiment, and Momentum, click here. AMGN is ranked #12 of 494 stocks in the Biotech industry.
Gilead Sciences Inc. (GILD)
GILD is a research-based biopharmaceutical company that discovers, develops and commercializes medicines in areas of unmet medical need. The Foster City, Calif., company’s primary areas of focus include treatments for HIV/AIDS, liver diseases, cancer, inflammatory and respiratory diseases and cardiovascular conditions.
GILD company Kite this month announced top-line results from the primary analysis of ZUMA-7, a randomized Phase 3 multicenter study showing superiority of CAR T-cell therapy Yescarta, compared to standard of care (SOC) in adult patients with second line relapsed or refractory large B-cell lymphoma (LBCL). Approximately 40% of patients with LBCL will need second-line treatment because their cancer will either relapse or become refractory to treatment. Consequently, this study is expected to make a significant contribution in the treatment of LBCL patients.
Also this month, GILD’s Kite and Shoreline Biosciences, Inc. (Shoreline), a biotechnology company, announced a strategic partnership to develop novel cell therapies across a variety of cancer targets. For this, the collaboration will leverage Shoreline’s deep expertise in iPSC differentiation and genetic reprogramming in combination with Kite’s extensive cell therapy development and manufacturing expertise. GILD’s total revenues came in at $6.42 billion for its fiscal first quarter, ended March 31, 2021, which represents a 15.8% year-over-year rise. The company’s non-GAAP operating income increased 26.1% year-over-year to $3.49 billion. While its non-GAAP net income increased 22.9% year-over-year to $2.63 billion, its non-GAAP EPS increased 23.8% year-over-year to $2.08. As of March 31, 2021, the company had $4.07 billion in cash and cash equivalents.
Analysts expect GILD’s EPS to improve 57% year-over-year to $1.74 for the current quarter, ending June 30, 2021. Its revenue is expected to improve 18.4% year-over-year for the next quarter to $6.09 billion. Analysts expect the stock’s EPS to grow at 3% per annum over the next five years. GILD has gained 19.5% over the past six months and ended yesterday’s trading session at $67.93.
GILD’s POWR Ratings reflect this promising outlook. The stock has an overall B rating, which equates to Buy in our POWR Ratings system.
The stock has an A grade for Value, and a B grade for Growth and Quality. In addition to the POWR Ratings grades we’ve just highlighted, one can see GILD’s ratings for Stability, Momentum, and Sentiment here. GILD is ranked #7 in the Biotech industry.
Illumina, Inc. (ILMN)
ILMN in San Diego, is a provider of sequencing and array-based technologies for genetic analysis, serving customers in the research, clinical and applied markets. The company's products are used for applications in the life sciences, oncology, reproductive health, agriculture and other emerging segments.
ILMN and Next Generation Genomic Co., Ltd. (NGG) launched VeriSeq NIPT Solution v2, a CE-IVD, next-generation sequencing (NGS)-based approach to noninvasive prenatal testing (NIPT), in Thailand on May 31. Using ILMN’s VeriSeq NIPT Solution v2, the prenatal test delivers a comprehensive view of the fetal genome, enabling healthcare providers to support expectant parents with more informed, timely and personalized pregnancy management options. The companies expect to expand their market reach with the therapy in the near-term.
On April 22, ILMN and Kartos Therapeutics, Inc. formed a new partnership to co-develop a TP53 companion diagnostic (CDx) based on the content of ILMN’s comprehensive genomic profiling assay, TruSight Oncology 500 (TSO 500). They will focus on the co-development of multiple CDx claims in blood cancers for Kartos’ KRT-232, a potent and selective oral MDM2 inhibitor that activates p53 to drive tumor cell death in TP53 wild-type cancers. The companies hope to develop standardized, globally distributable tools for precision oncology.
For its fiscal quarter, ended April 4, 2021, ILMN’s total revenues were $1.09 billion, which represents a 27.2% improvement year-over-year. The company’s non-GAAP gross profit increased 22.8% year-over-year to $771 million. Its non-GAAP operating profit has been reported at $351 million, up 21.4% from the prior-year period. ILMN's non-GAAP net income increased 14.4% year-over-year to $278 million. Its non-GAAP EPS increased 15.2% year-over-year to $1.89. The company had cash and cash equivalents of $4.4 billion, as of April 4, 2021.
Analysts expect ILMN's EPS to improve 117.3% year-over-year for its current quarter, ending June 30, 2021, to $1.35. The stock surpassed the Street’s EPS estimates in three of the trailing four quarters. And its $1.01 billion consensus revenue estimate for the current quarter represents a 59.9% rise on a year-over-year basis. Analysts expect the stock’s EPS to grow at 20.1% per annum over the next five years.
ILMN has gained 56.9% over the past nine months and 18.1% over the past one month. It ended yesterday’s trading session at $479.18.
ILMN’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall B rating, which equates to Buy in our proprietary rating system. The stock has an A grade for Quality, and a B grade for Growth and Sentiment. We have also graded ILMN for Value, Stability, and Sentiment, which you can find here. ILMN is ranked #5 in the Biotech industry.
Regeneron Pharmaceuticals, Inc. (REGN)
REGN is a biopharmaceutical company that is based in Tarrytown, New York and develops, manufactures and commercializes medicines for the treatment of serious medical conditions. The company’s marketed products include EYLEA injection, Praluent injection, ARCALYST injection for subcutaneous use, and ZALTRAP injection for intravenous infusion, among others.
On June 26, 2021, REGN and Intellia Therapeutics, Inc. (NTLA) announced positive interim data from an ongoing Phase 1 clinical study of their lead in vivo genome editing candidate, NTLA-2001, which is being developed as a single-dose treatment for transthyretin (ATTR) amyloidosis. Given its safety and tolerability profile so far, NTLA-2001 is continuing to be evaluated in the dose-escalation portion of the study to determine if a higher dose could result in a deeper reduction in disease-causing protein levels leading to the potential for more meaningful clinical benefit. The European Commission (EC) has approved Sanofi (SNY) and REGN’s PD-1 inhibitor Libtayo to treat adults with locally advanced or metastatic basal cell carcinoma (BCC) who have progressed on or are intolerant to a hedgehog pathway inhibitor (HHI). Because BCC is the most common type of skin cancer it is increasing across many European countries. So, this approval is expected to generate good sales in the near-term.
REGN’s revenues for its fiscal first quarter, ended March 31, 2021, increased 38.3% year-over-year to $2.53 billion. The company’s income from operations is reported at $1.11 billion, which represented a 58.9% year-over-year improvement. While its non-GAAP net income increased 43.9% year-over-year to $1.11 billion, its non-GAAP EPS increased 49.8% year-over-year to $9.89.
A $17.90 consensus EPS estimate for the current quarter, ending June 30, 2021, represents a 149.9% improvement from the prior-year period. It surpassed the Street’s EPS estimates in each of the trailing four quarters. The $3.92 billion consensus revenue estimate for the current quarter represents a 100.7% rise from the prior-year period. Analysts expect the stock’s EPS to grow at a 4% rate per annum over the next five years. REGN has gained 13.4% over the past three months and closed yesterday’s trading session at $545.98.
It’s no surprise that REGN has an overall A rating, which translates to Strong Buy in our POWR Ratings system. It also has an A grade for Value and Growth, and a B grade for Quality and Sentiment. In addition to the POWR Ratings grades we’ve just highlighted, one can see REGN’s ratings for Momentum and Stability here. REGN is ranked #1 in the Biotech industry.
Note that REGN is one of the few stocks handpicked by our Chief Value Strategist, David Cohne, currently in the POWR Value portfolio. Learn more here.
AMGN shares were trading at $243.75 per share on Wednesday afternoon, up $1.29 (+0.53%). Year-to-date, AMGN has gained 7.55%, versus a 15.25% rise in the benchmark S&P 500 index during the same period.
About the Author: Sweta Vijayan
Sweta is an investment analyst and journalist with a special interest in finding market inefficiencies. She’s passionate about educating investors, so that they may find success in the stock market.4 Unstoppable Biotech Stocks to Buy Right Now appeared first on StockNews.com