As the medical breakthroughs progress, biotech stocks are expected to play a significant role in revolutionizing healthcare. Medical advancements in neuroscience and gene therapy have opened up new horizons within this sector.
Therefore, investors looking to benefit from such contribution to the economy might consider biotech stocks, namely, Regeneron Pharmaceuticals, Inc. (REGN), Biogen Inc. (BIIB), and Gilead Sciences, Inc. (GILD).
Innovations targeting neurological disorders, such as Alzheimer’s and Parkinson’s, promise to transform treatment approaches by developing therapies that address the underlying causes of these conditions. Several collaborations involving large pharma companies signal a renewed interest in the neuroscience sector. Moreover, the companies are already moving on to early successes in neurotherapeutics, bringing hope to millions of patients.
The expanding field of gene-editing technology is also attracting significant investment interest as companies develop cancer therapies and other targeted treatments. There have been cell and gene therapy advancements like a recombinant AAV vector for glioblastoma treatment, peptide-modified AAV capsids for muscle targeting, and oral delivery systems for oligonucleotides.
So far this year, the FDA has approved 38 cellular and gene therapy products and also 38 novel drugs that target conditions from lung cancer to Alzheimer’s disease and various other chronic ailments. Furthermore, the global biotechnology market is anticipated to reach $4.61 trillion by 2034, growing at a CAGR of 11.5%.
The biotech industry offers an avenue that aligns financial and societal goals, paving the way for transformative impacts in medicine.
With that in mind, let’s delve into the fundamentals of the three Biotech stock picks, starting with the third choice.
Stock #3: Regeneron Pharmaceuticals, Inc. (REGN)
REGN discovers, invents, develops, manufactures, and commercializes medicines for treating various diseases worldwide. The company’s products include EYLEA injection, Dupixent Injection, Libtayo Injection, Praluent Injection, Kevzara Injection, and others.
On November 6, REGN received approval from the European Commission for Dupixent® (dupilumab) to treat eosinophilic esophagitis (EoE) in children aged 1 to 11 years. This approval expands EoE in adults and adolescents, creating a milestone in treating pediatric patients.
On October 18, REGN announced positive data for EYLEA HD® (aflibercept) injection 8 mg from an extension study of the Phase 3 PHOTON trial in patients with diabetic macular edema (DME). It demonstrates continued durable vision and anatomic improvements among 88% of EYLEA HD patients in this phase.
REGN, for the third quarter (ended September 30, 2024), reported total revenues of $3.72 billion, indicating a 10.6% growth from the prior year quarter. Its income from operations increased 6.2% year-over-year to $1.18 billion. The company’s non-GAAP net income came in at $1.46 billion and $12.46 per share, up 10% and 7.5% year-over-year, respectively.
The consensus revenue estimate of $3.63 billion for the fiscal first quarter (ending March 2025) represents a 15.4% increase year-over-year. The consensus EPS estimate of $10.99 for the same quarter indicates a 15.1% improvement year-over-year. The company has an excellent surprise history; it surpassed the consensus revenue and EPS estimates in three of the trailing four quarters.
The stock has surged marginally over the past year to close the last trading session at $829.43.
REGN’s POWR Ratings reflect this robust outlook. The stock has an overall rating of B, 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.
REGN has a B grade for Value and Quality. It is ranked #25 out of 328 stocks in the Biotech industry. Click here to see the additional ratings for REGN (Growth, Momentum, Stability, and Sentiment).
Stock #2: Biogen Inc. (BIIB)
BIIB is a global biopharmaceutical company focused on discovering, developing, and delivering advanced therapies for people living with serious and complex diseases worldwide. The company has a portfolio of medicines to treat multiple sclerosis (MS), spinal muscular atrophy (SMA), Alzheimer's disease, and amyotrophic lateral sclerosis (ALS).
On October 29, BIIB and Neomorph Inc. collaborated on research to discover and develop molecular glue degraders for Alzheimer’s, rare neurological and immunological diseases. This collaboration is under the terms where Neomorph's molecular glue degrader platform and BIIB’s expertise with cutting-edge innovation will be able to create a meaningful therapy for the patients.
In the same month, BIIB received Breakthrough Therapy Designation (BTD) from the U.S. Food and Drug Administration (FDA) for felzartamab, an investigational anti-CD38 monoclonal antibody. It is used to treat late antibody-mediated rejection (AMR) without T-cell mediated rejection in kidney transplant patients. This designation will enhance the efficiency in the development of the antibody.
For the third quarter of 2024, which ended on September 30, BIIB’s total revenues stood at $1.77 billion. The company’s net income stood at $388.50 million compared to the prior-year quarter’s loss of $68.10 million, while its EPS came in at $2.66 versus a loss of $0.47 per share last year. In addition, BIIB’s adjusted free cash flow rose 73.8% from the year-ago value to $900.60 million.
Per the updated financial guidance for the full year 2024, BIIB now forecasts non-GAAP EPS between $16.10 and $16.60, up from the previous estimate of $15.75 and $16.25.
Street expects BIIB’s revenue for the fiscal fourth quarter (ending December 2024) to increase 1.2% year-over-year to $2.41 billion. Its EPS for the same period is expected to register a 16.8% growth from the prior year, settling at $3.44. In addition, it surpassed the EPS estimates in three of the trailing four quarters, which is promising.
BIIB’s stock has surged 1.9% intraday to close the last trading session at $176.93.
BIIB’s bright prospects are reflected in its POWR Ratings. The stock has an overall rating of A, which translates to a Strong Buy in our proprietary rating system.
It also has an A grade for Value and a B for Growth and Sentiment. Within the same industry, it is ranked #7 out of 328 stocks. Click here to see BIIB’s ratings for Momentum, Stability, and Quality.
Stock #1: Gilead Sciences, Inc. (GILD)
GILD is a biopharmaceutical company dedicated to advancing treatments for life-threatening diseases such as human immunodeficiency virus (HIV), viral hepatitis, COVID-19, and cancer. Its portfolio of marketed products includes Biktarvy, Genvoya, Odefsey, Truvada, Harvoni, Vemlidy, and Veklury, among others.
On October 2, GILD signed non-exclusive, royalty-free voluntary licensing agreements with six pharmaceutical manufacturers to produce and sell generic lenacapavir (pending regulatory approval) in 120 countries (mainly low- and lower-middle-income) with high HIV incidence. This agreement is to make HIV prevention medicine available worldwide once it is approved.
On September 10, GILD and Genesis Therapeutics, Inc. announced a strategic collaboration to discover and develop novel, small molecule therapies across multiple targets.
This collaboration will utilize Genesis’ advanced AI platform, GEMS, to design and optimize molecules for targets chosen by GILD. The two companies will collaborate on early-stage research, with GILD holding exclusive rights to further develop and market any compounds that come from their joint efforts.
In the fiscal second quarter, which ended on June 30, 2024, GILD’s total revenues increased 5.4% year-over-year to $6.95 billion. The company reported operating income of $2.64 billion, indicating 58.8% growth from the prior-year quarter. GILD’s non-GAAP net income attributable came in at $2.52 billion, up 49.2% year-over-year, while its non-GAAP EPS grew 50% from the year-ago value to $2.01.
According to the full-year guidance, GILD forecasts product sales to range from $27.10 billion to $27.50 billion. The company also expects non-GAAP EPS to be between $3.60 and $3.90, an increase from the previous guidance of $6.85 to $7.25.
Analysts expect GILD’s revenue and EPS for the current year (ending December 2024) to be $27.73 billion and $3.79, respectively. For the fiscal year 2025, both its revenue and EPS are expected to grow by marginally and 91.5% from the prior year to $28.05 billion and $7.26, respectively.
Over the past six months, the stock has gained 39.3%, closing the last trading session at $90.22.
GILD’s strong fundamentals are reflected in its POWR Ratings. It has an overall rating of A, which equates to a Strong Buy in our proprietary rating system.
It has an A grade for Value and a B for Sentiment and Quality. The stock is ranked #4 in the Biotech industry. Click here to access the additional GILD ratings (Growth, Momentum, and Stability).
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GILD shares were trading at $91.26 per share on Wednesday afternoon, up $1.04 (+1.15%). Year-to-date, GILD has gained 16.28%, versus a 25.37% rise in the benchmark S&P 500 index during the same period.
About the Author: ShreyaRathi
