Biotech stocks are trading down, having taking a beating after President-elect Donald Trump tapped Robert F. Kennedy Jr. to lead the Department of Health and Human Services.
Kennedy's potential impact on biotech is something of a black box. He's a well-known vaccine skeptic and has criticized weight-loss drugs, but he has also said he's open to the use of psychedelics in therapeutic settings. Trump has said he will let Kennedy "go wild on health care." He also claimed drug companies have engaged in "deception, misinformation and disinformation."
Pfizer, Moderna, BioNTech and Novavax stocks slumped on the announcement, while shares of biotech stocks tied to psychedelics jumped. The 735-company Medical-Biomed/Biotech industry group collectively tumbled 4% on Nov. 15, following the post from Trump on the social network X.
Biotech stocks are below their 50-day and 200-day moving averages. The group ranks No. 62 out of 197 groups tracked by Investor's Business Daily. Meanwhile, the pharma group ranks No. 150.
The industry group has a Relative Strength Rating of 67, according to IBD Digital. This means the industry group now ranks in the top 33% of all industry groups in terms of 12-month performance.
But it's key to watch specific measures when examining stocks. In terms of fundamental and technical metrics, the best biotech stocks trading above 10 right now are:
- Ligand Pharmaceuticals
- Exelixis
- Catalyst Pharmaceuticals
- Corcept Pharmaceuticals
- United Therapeutics
The No. 1 Biotech Stock: Ligand
Ligand invests in royalty deals and boasts more than 100 partnered commercial and development-stage programs.
Recently, Ligand collaborator Merck received Food and Drug Administration approval for its pneumococcal vaccine for adults, Capvaxie. Ligand also agreed to acquire Apeiron Biologics for $100 million. The deal includes royalty rights to a cancer treatment called Qarziba. This is the sixth key asset added to Ligand's commercial-stage portfolio since the beginning of 2023.
Ligand partner Verona Pharma also won FDA approval for its inhaled treatment for chronic obstructive pulmonary disease, or COPD. Ligand will receive a low single-digit royalty on worldwide net sales of the drug, Ohtuvayre.
In the third quarter, Ligand easily beat expectations with adjusted income of $1.84 per share on $51.8 million in sales. Earnings surged more than 80%, while sales climbed north of 57%.
The biotech stock has a Composite Rating of 95 and a Relative Strength Rating of 92. The CR is a 1-99 measure of a stock's fundamental and technical measures. Shares recently broke out of a cup-with-handle base with an entry at 108.83, and were trading inside the 5% chase zone on Dec. 20.
Ligand also lands on the IBD Tech Leaders list.
Exelixis Focuses On Cancer Drugs
Exelixis is a relatively new addition to the list of top biotech stocks.
The company has made a name for itself as a cancer treatment specialist. It sells Cabometyx, a treatment for several forms of kidney, liver and thyroid cancer. The company's Cometriq treats thyroid cancer.
In the September quarter, Exelixis earned 40 cents per share and reported $539.5 million in sales. Profit topped expectations by 6 cents a share and climbed from no earnings in the year-earlier period. Sales jumped more than 14% and crushed projections for $490.3 million.
Exelixis stock rocketed almost 13% on Oct. 30, the day following its third-quarter report. Shares are broke out of a flat base with a buy point at 27.53 on Sept. 17 and quickly topped the profit-taking zone. They have yet to form a new base.
Shares have a strong Composite Rating of 96 and a lower Relative Strength Rating of 92.
The biotech stock lands on the IBD Tech Leaders list as well.
Biotech Licenses Products
Catalyst Pharmaceuticals licenses already or soon-to-be approved treatments for rare diseases and diseases of the central nervous system.
Today, the company has three products. Firdapse treats a neuromuscular condition that often affects small cell lung cancer patients. Fycompa is a seizure treatment. Catalyst also has a Duchenne muscular dystrophy drug called Agamree.
In the September quarter, Catalyst beat expectations with adjusted earnings of 57 cents per share on $126.4 million in sales. Earnings grew more than 16% year over year, while sales jumped more than 23%.
The biotech stock is now below its 50-day line, but remains above its 200-day moving average. Shares have a strong Composite Rating of 97. Shares also have a Relative Strength Rating of 86.
Catalyst stock is also a Tech Leader.
Corcept Crushes Earnings Views
Corcept Therapeutics is proving itself to be a strong biotech stock.
The company has a broad pipeline of treatments in testing for Cushing syndrome, cancer, neurological diseases, addiction and psychiatry. It's best known for Korlym, a treatment for patients with Cushing syndrome who also have type 2 diabetes.
During the third quarter, Corcept earned an adjusted 41 cents per share on $182.5 million in sales. Earnings surged more than 46% and handily beat expectations for 28 cents. Sales surged nearly 48% to top forecasts for $172 million.
The biotech stock broke out of a cup base with a buy point at 39.75 on Sept. 17 and ran up above its profit-taking zone. Shares aren't currently forming a new base and are back below their 50-day line.
It has a Composite Rating of 94 and a slightly better Relative Strength Rating of 95.
Corcept Therapeutics is also a Tech Leader.
Biotech Stock Hits A Record High
United Therapeutics is a top-rated biotech stock. The company makes a handful of drugs for chronic diseases.
Its biggest drug is Tyvaso, a treatment for pulmonary arterial hypertension, or PAH. During the third quarter, Tyvaso sales ramped 33% to $433.8 million. That beat expectations for $421.5 million. Both dry-powder and nebulized versions of the drug showed strong growth.
Analysts are closely watching United Therapeutics' pipeline. The company now expects to have the results of a final-phase PAH study in 2026 vs. prior expectations for 2025, Leerink Partners analyst Roanna Ruiz said in a report.
The biotech stock hit a record high intraday on Nov. 8. Shares broke out of a flat base with a buy point at 366.08 on Oct. 16. Later, United Therapeutics stock dropped as much as 3.4% below its entry. But that wasn't quite enough to trigger a sell rule. Savvy investors are encouraged to sell when a stock falls 7% to 8% below its entry.
On Dec. 20, shares were trading below their buy zone.
United Therapeutics stock has a strong Composite Rating of 95, with a lower Relative Strength Rating of 90.
The biotech stock is an IBD Tech Leader.
Follow Allison Gatlin on X, the platform formerly known as Twitter, at @IBD_AGatlin.
