Thanks to groundbreaking advancements in precision medicine and immunotherapy, the biotech industry is undergoing a transformative phase, particularly in cancer treatment. The companies are reshaping the way cancer is diagnosed and treated with innovations.
Below, I have highlighted three fundamentally strong biotech stocks: Regeneron Pharmaceuticals, Inc. (REGN), Amgen Inc. (AMGN), and Gilead Sciences, Inc. (GILD), which are well-positioned for long-term growth with their research breakthroughs.
Immunotherapy, including CAR-T cell therapy and immune checkpoint inhibitors, has been a game-changer for cancer treatment. These approaches enable the immune system to recognize and attack cancer cells more effectively. Companies pioneering such therapies are seeing robust growth, driven by the high efficacy and increasing adoption of their treatments.
With the global cancer burden increasing, the demand for innovative treatments is also surging. In the third quarter of 2024, the US Food and Drug Administration (FDA) approved 16 oncology drugs, including six new agents and 25 expanded indications for existing drugs.
The global biotechnology market is anticipated to reach $3.88 trillion by 2030, exhibiting a CAGR of 13.9%. The market is driven by strong government support, improvement in approval processes, and standardization of clinical studies. Companies with strong pipelines and innovative therapies stand to gain as these treatments revolutionize the healthcare landscape.
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 December 9, REGN announced new and positive data for odronextamab monotherapy in patients with previously untreated follicular lymphoma with twelve abstracts spanning several B-cell non-Hodgkin lymphoma (B-NHL) subtypes. It demonstrates the effectiveness of the paradigm-changing potential of the odronextamab development program.
As per Elizabeth Brém, Associate Clinical Professor, Division of Hematology/Oncology at UC Irvine, “The OLYMPIA-1 Phase 3 trial is designed to explore a novel, chemotherapy-free, fixed duration treatment that is being studied in the outpatient setting in patients with previously untreated follicular lymphoma.”
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.
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 $10.95 for the same quarter indicates a 14.6% 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 gained marginally intraday to close the last trading session at $788.
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 #27 out of 332 stocks in the Biotech industry. Click here to see the additional ratings for REGN (Growth, Momentum, Stability, and Sentiment).
Stock #2: Amgen Inc. (AMGN)
AMGN discovers, develops, manufactures, and delivers human therapeutics globally. The company’s product portfolio includes Enbrel, Otezla, Prolia, XGEVA, Repatha, Nplate, KYPROLIS, Aranesp, EVENITY, Vectibix, BLINCYTO, TEPEZZA, and KRYSTEXXA.
On December 7, AMGN announced new data that demonstrates adding BLINCYTO® (blinatumomab) to chemotherapy significantly improves disease-free survival (DFS) in newly diagnosed pediatric patients with National Cancer Institute (NCI) standard risk B-cell acute lymphoblastic leukemia. The findings further establish BLINCYTO as a versatile first-line consolidation therapy across all ages and treatment backbones.
The same week, AMGN announced a $1 billion expansion to establish a second drug substance manufacturing facility in North Carolina. This expansion will help AMGN to meet the growing demand for therapies and enhance the company's global biomanufacturing network.
For the third quarter of 2024, which ended on September 30, AMGN’s total revenues increased 23.2% year-over-year, amounting to $8.50 billion. The company reported non-GAAP income from operations of $4.04 billion, indicating an 18.8% increase from the prior-year quarter.
In addition, AMGN’s non-GAAP net income came in at $3.02 billion, up 13.4% year-over-year, while its non-GAAP net income per share grew 12.5% from the year-ago value to $5.58. Its adjusted free cash flow rose 31.9% from the year-ago value to $3.31 billion.
As per the updated financial guidance for the full year 2024, AMGN now forecasts revenue to be in the range of $33 billion to $33.80 billion and its non-GAAP EPS between $19.20 and $20.
Street expects AMGN’s revenue for the fiscal fourth quarter (ending December 2024) to increase 8% year-over-year to $8.85 billion. Its EPS for the same period is expected to register a 6.8% growth from the prior year, settling at $5.03. In addition, it surpassed the consensus revenue and EPS estimates in three of the trailing four quarters, which is promising.
AMGN’s stock has surged 3.2% over the past year to close the last trading session at $277.63.
AMGN’s bright prospects are reflected in its POWR Ratings. The stock has an overall rating of B, which translates to a Buy in our proprietary rating system.
It also has a B grade for Growth and Quality. Within the same industry, it is ranked #18 out of 332 stocks. Click here to see AMGN’s ratings for Value, Momentum, Stability, and Sentiment.
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 December 9, GILD announced positive results from a five-year follow-up analysis of ZUMA-5, a Phase 2 study of Yescarta (axicabtagene ciloleucel) in patients with relapsed/refractory non-Hodgkin lymphomas including follicular lymphoma or marginal zone lymphoma. Dr. Sattva S. Neelapu, lead investigator at the University of Texas MD Anderson Cancer Center, believes that such impressive results may have a curative effect on difficult-to-treat blood cancers.
In the same month, GILD and Tubulis entered an exclusive option and license agreement to discover and develop an antibody-drug conjugate (ADC) against a solid tumor target. Under this agreement, GILD will gain access to Tubulis’ proprietary Tubutecan and Alco5 platforms, and Tubulis will receive a payment of $20 million. This agreement will allow GILD to explore a range of solutions to help increase the therapeutic value of the ADC modality.
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 $28.30 billion and $4.42, respectively. For the fiscal year 2025, its revenue and EPS are expected to grow marginally, and 69.8% from the prior year to $28.31 billion and $7.50, respectively.
Over the past six months, the stock has gained 40%, closing the last trading session at $90.59.
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 Sentiment and a B for Growth and Quality. The stock is ranked first in the Biotech industry. Click here to access the additional GILD ratings (Momentum and Stability).
What To Do Next?
Get your hands on this special report with 3 low priced companies with tremendous upside potential even in today’s volatile markets:
3 Stocks to DOUBLE This Year >
AMGN shares were trading at $276.77 per share on Tuesday afternoon, down $0.86 (-0.31%). Year-to-date, AMGN has declined -1.00%, versus a 28.22% rise in the benchmark S&P 500 index during the same period.
About the Author: ShreyaRathi
