The high efficiency of the CRISPR-Cas9 system has resulted in enhanced recognition of gene editing technology and has resulted in significant investments within the field. Further, the wide application of gene-editing across segments like drug development, agriculture, diagnostics, clinical therapy, and others boost its development.
Given the industry’s solid prospects, investors could consider fundamentally solid gene-editing stocks Eli Lilly and Company (LLY), Sanofi (SNY), and Vertex Pharmaceuticals Incorporated (VRTX) for future health advances.
The biotechnology market is experiencing increasing popularity with the application of genomics, personalized medicine, and biopharmaceuticals supported by rising cost of healthcare services, increasing number of chronic- diseases, and prevalence of precision medicine. Also, innovative treatments like gene editing and cell therapy are paving new directions for the field.
The biotechnology market is poised to reach the market volume of $3.90 trillion by 2031, expanding at a CAGR of 13.9%.
In particular, with the rising surge in the genetic abnormalities and hereditary diseases, the gene editing technology is on the rise with its offering of set of processes to modify the DNA within an organism’s genome. The technology has evolved to be the most effective way to examine gene function, and perform other life science-related tasks.
The global gene editing market is expected to exhibit growth at a CAGR of 15.7%, resulting in a market value of $29.93 billion by 2032. The rapid development of new gene editing technologies like CRISPR-Cas9, TALENs, and zinc finger nucleases have created new opportunities and the creation of cutting-edge medicines, fueling the market prospects.
Given the industry’s bright prospects, investing in fundamentally strong gene-editing stocks LLY, SNY, and VRTX could be wise this week for substantial returns.
Eli Lilly and Company (LLY)
LLY discovers, develops, and markets human pharmaceuticals worldwide. The company offers medicines for diabetes, obesity, rheumatoid arthritis, plaque psoriasis, ulcerative colitis, depressive disorder, and others. The company also offers oncology products.
On August 1, LLY announced positive topline results from the SUMMIT phase 3 clinical trial which evaluated the safety and efficacy of tirzepatide injection for patients with heart failure with preserved ejection fraction and obesity. Tirzepatide showed statistically significant improvements in both primary endpoints with a reduction in the risk of heart failure outcomes.
On July 8, LLY entered a definitive agreement with Morphic Holding, Inc. to acquire Morphic, a biopharmaceutical company developing oral integrin therapies for treatment of serious chronic diseases. The strategic acquisition reinforces LLY’s commitment to develop new therapies in gastroenterology and will expand its immunology pipeline with oral integrin therapies.
On July 2, LLY’s Kisunla™ (donanemab-azbt), an alzheimer’s treatment for adults with early symptomatic Alzheimer’s disease was approved by the FDA. Kisunla is the first and only amyloid plaque-targeting therapy showing evidence to support stopping therapy when amyloid plaques are removed which can lead to lower treatment costs and fewer infusions.
During the second quarter that ended June 30, 2024, LLY’s revenue increased 36% year-over-year to $11.30 billion. Its operating income grew 74.8% from the year-ago value to $3.71 billion. The company’s non-GAAP net income and EPS came in at $3.54 billion and $3.92, indicating increases of 86% and 85.8% from the prior year’s quarter, respectively.
According to its updated 2024 financial guidance, LLY expects revenue in the range of $45.40 billion – $46.60 billion, up from the prior guidance of $42.40 billion - $43.60 billion. Also, its non-GAAP EPS is expected to be between $16.10 and $16.60, compared to the previous guidance of $13.50 and $14.
Analysts expect LLY’s revenue for the third quarter (ending September 2024) to grow 26.5% year-over-year to $12.02 billion, and its EPS is expected to increase 4325.9% year-over-year to $4.43 for the same period. Moreover, the company has surpassed the consensus EPS estimates in each of the trailing four quarters.
Over the past six months, the stock has surged 20.5% and 69.5% over the past year to close the last trading session at $891.68.
LLY’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. The POWR Ratings are calculated by considering 118 different factors, each weighted to an optimal degree.
LLY has an A grade for Growth and Sentiment. It is ranked #30 out of 153 stocks in the Medical - Pharmaceuticals industry.
To check other POWR Ratings of LLY for Value, Quality, Momentum, and Stability, click here.
Sanofi (SNY)
Headquartered in Paris, France, SNY is a healthcare company which is engaged in the research, development, manufacture, and marketing of therapeutic solutions internationally. The company operates through Pharmaceuticals; Vaccines; and Consumer Healthcare segments.
In terms of forward Price/Sales, SNY is trading at 2.55x, 29.4% lower than the industry average of 3.61x. Likewise, the stock’s forward Price/Book multiple of 1.58 is 43.6% lower than the industry average of 2.81. Also, its forward EV/EBITDA of 10.13x is 25.6% lower than the industry average of 13.61x.
For the second quarter that ended June 30, 2024, SNY’s net sales increased 7.8% year-over-year to €10.74 billion ($11.73 billion). Its gross profit grew 7.5% from the year-ago value to €7.97 billion ($8.70 billion). The company’s business net income and EPS came in at €2.16 billion ($2.36 billion) and €1.73, respectively.
Furthermore, the company’s total assets stood at €129.75 billion ($141.62 billion) as of June 30, 2024, compared to €126.46 billion ($138.03 billion) as of December 31, 2023.
Street expects SNY’s revenue for the third quarter (ending September 2024) to increase 9.2% year-over-year to $13.80 billion. The company’s EPS for the same period is expected to grow 5.2% year-over-year to $1.42. For the fiscal year 2025, its revenue and EPS are expected to increase 6.9% and 15.3% year-over-year to $55.19 billion and $4.88, respectively.
SNY’s stock has gained 5.3% over the past month and 12.6% over the past six months to close the last trading session at $52.37.
SNY’s sound fundamentals 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.
The stock has a B grade for Sentiment, Value, Stability, and Growth. Within the Medical - Pharmaceuticals industry, SNY is ranked #19 among the 153 stocks.
Click here to access additional ratings of SNY for Quality and Momentum.
Vertex Pharmaceuticals Incorporated (VRTX)
VRTX focuses on investing in scientific innovation to create transformative medicines for people with serious diseases. The company has four approved drugs that treat the underlying cause of cystic fibrosis (CF), and one approved therapy for severe sickle cell disease (SCD) and transfusion-dependent beta-thalassemia (TDT).
On July 2, VRTX announced that the FDA had accepted its New Drug Application (NDA) for the investigational once-daily vanzacaftor/tezacaftor/deutivacaftor triple combination therapy (Avanza triple).
This therapy targets people with CF aged six years and older who have at least one F508del mutation or another responsive mutation in the cystic fibrosis transmembrane conductance regulator (CFTR) gene.
During the second quarter which ended on June 30, 2024, VRTX’s net product revenues increased 6.1% year-over-year to $2.64 billion. Its interest income grew 8.2% from the prior year’s quarter to $156.50 million.
Furthermore, the company’s total assets were $23.92 billion, compared to $22.73 billion as of December 31, 2023.
Analysts expect VRTX’s revenue for the third quarter (ending September 2024) to increase 8.4% year-over-year to $2.69 billion and its EPS is expected to grow marginally year-over-year to $4.11 for the same quarter. Furthermore, the company topped the consensus EPS estimates in three of the trailing four quarters.
Shares of VRTX have gained 10.8% over the past six months and 35.7% over the past year to close the last trading session at $468.45.
VRTX’s POWR Ratings reflect its robust outlook. VRTX has a B grade for Stability. It is ranked #49 among 339 stocks within the Biotech industry.
To see the other ratings of VRTX for Growth, Sentiment, Momentum, Quality and Value, click here.
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LLY shares rose $1.76 (+0.19%) in after-hours trading Wednesday. Year-to-date, LLY has gained 60.38%, versus a 15.12% rise in the benchmark S&P 500 index during the same period.
About the Author: Rjkumari Saxena
Rajkumari started her career as a writer but gradually shifted her focus to financial journalism, leveraging her educational background in Commerce. Fascinated by the interplay of business and economic shifts in equities, she aspires to evolve as an analyst. With a knack for simplifying complex financial concepts, her mission is to empower investors with insights that lead to profitable decisions.
3 Gene-Editing Stocks to Buy for Future Health Advances StockNews.com
