Biotech stocks hit a two-year high in February, but have trended sideways in the months since despite a spate of mergers and positive clinical news.
In 2020, the industry was thrust into the pandemic limelight as Pfizer and its partner BioNTech, along with Moderna and Johnson & Johnson, launched a trio of Covid vaccines. But as society learned to live with Covid — and other concerns around the economy and politics took center stage — interest in biotech fell by the wayside.
Investors returned in late 2023 and early 2024 as Big Pharma began spending its dry power on biotech takeovers. Both acquisition momentum and biotech stocks have slowed. The industry group hit a two-year high at 3,039.79 on Feb. 28. Shares reached a recent intraday low at 2,556.05 on April 25, down 16% over that time period. Since then, biotech stocks have risen about 15%, as of early trades on July 19.
The industry group has a Relative Strength Rating of 90, which has improved from 85 just a week ago, according to IBD Digital. This means the industry group now ranks in the top 10% of all industry groups in terms of 12-month performance.
Notably, some companies are fighting back against plans for Medicare to begin negotiating the prices of the costliest drugs.
The biotech group ranks No. 17 out of 197 industry groups that IBD tracks. Meanwhile, the pharma group ranks No. 142.
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:
- Halozyme Therapeutics
- United Therapeutics
- Vertex Pharmaceuticals
- Ligand Pharmaceuticals
- ADMA Biologics
This Biotech Stock Gets Under Your Skin
Halozyme Therapeutics is an expert in drug delivery.
The company is known for its Enhanze technology, which helps deliver drugs under the skin via a subcutaneous injection. The technology is behind some of the biggest medicines on the market, including Johnson & Johnson's Darzalex Faspro and Roche's Herceptin.
In the first quarter, Halozyme earned an adjusted 79 cents per share on $196 million in sales, up a respective 68% and 21%. Earnings beat forecasts, while sales missed.
Halozyme stock surged almost 13% on June 6 after raising its full-year guidance and updating its five-year outlook. That was based on a new European patent covering the Enhanze technology. The patent is validated in 37 European countries and expires in March 2029.
The company now expects full-year sales to come in between a range of $935 million to $1.02 billion, growing 13% to 22%. Halozyme also expects adjusted earnings of $3.65 to $4.05 per share, up 32% to 46% year over year.
Halozyme stock has a perfect Composite Rating of 99, and a strong Relative Strength Rating of 93.
Shares broke out of a cup-with-handle base with a buy point at 42.64 on May 8, according to MarketSurge. Shares surged into the profit-taking zone one June 6, and were above that zone in early trades on July 19. Savvy investors are encouraged to take some profits when a stock rises 20% to 25% above its entry.
The biotech stock is also well above its 50-day and 200-day moving averages.
Halozyme is also a Tech Leader.
Focusing On Treatments For PAH
United Therapeutics is another 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 March quarter, Tyvaso sales surged 56% to $372.5 million, beating forecasts for $368.3 million. The firm's second biggest moneymaker, another PAH drug called Remodulin, generated $128 million in sales, also above consensus calls for $119.6 million.
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 recent report.
The biotech stock hit a record high intraday on July 17. United Therapeutics stock has a perfect Composite Rating of 99, with a lower Relative Strength Rating of 93.
United Therapeutics stock lands on the Tech Leaders list as well as the IBD 50 list of elite growth stocks.
Vertex, One Of The Biggest Biotech Stocks
Vertex is among the biggest biotech stocks in terms of market cap. It trails only Amgen, and now leads Regeneron Pharmaceuticals and Gilead Sciences.
The company is the de facto leader of the cystic fibrosis drug market. In the first quarter, sales rose 13% to $2.69 billion. Earnings rocketed 56% to $4.76 per share, on an adjusted basis. Both measures beat Wall Street's forecasts. Vertex is also working on a next-generation triple regimen that proved non-inferior to the existing triplet, Trikafta, in recent testing.
Vertex and partner Crispr Therapeutics gained Food and Drug Administration approval for a gene-editing approach to a pair of blood diseases known sickle cell disease and beta thalassemia. The drug, now known as Casgevy, will cost $2.2 million for a single treatment. But uptake remains to be seen.
Vertex also bought its diabetes treatment partner, privately held ViaCyte. The companies are testing a cell replacement drug in type 1 diabetes.
Importantly, Vertex said recently its alternative to opioids in pain treatment reduced pain levels by 50% for 30% of patients, and by more than 20% of patients reported a 70% reduction in pain levels. Across three doses, patients with diabetic peripheral neuropathy reported at least a 2-point reduction in pain on an 11-point scale.
In another study, the pain drug proved it wasn't inferior to opioids in patients after a tummy tuck. But the drug appeared inferior to an opioid in managing the pain following a bunionectomy.
Vertex stock broke out of a cup base with a buy point at 448.40 on May 22. Shares briefly slipped below that entry, though not enough to trigger a sell rule, and have since risen above their buy zone.
The biotech stock has a strong Composite Rating of 98 and a Relative Strength Rating of 86.
Vertex is also a Tech Leader.
Ligand Joins The Biotech Stock Leaders List
Ligand Pharmaceuticals just joined the list of top biotech stocks.
The company invests in royalty deals and boasts more than 100 partnered commercial and development-stage programs.
Just this month, Ligand collaborator Merck received FDA 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.
Last month, Ligand partner Verona Pharma 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 first quarter, Ligand earned an adjusted $1.20 per share on $31 million in sales. Both metrics fell year over year, but handily beat expectations.
The biotech stock has a strong Composite Rating of 94 and a matching Relative Strength Rating. Shares broke out of a cup-with-handle base with an entry at 88.73 on July 8, and are now above their buy zone.
ADMA Stock Continues Rising
Biotech stock ADMA Biologics is on a run.
The company is known for its human immune globulin products. These drugs are intravenous infusions for people with immunodeficiencies.
Shares rocketed more than 27% on May 10 after the company reported adjusted earnings of 9 cents per share on $81.9 million in sales. Both measures beat expectations. Earnings turned around from a year-earlier loss, while sales rocketed 44% year over year.
Since then, the biotech stock has continued to climb. Shares are now out of dollar-stock status and trading at their highest point since January 2015. ADMA stock has a best-possible Relative Strength Rating of 99 and a matching Composite Rating.
The stock is also on the IBD Tech Leaders list.
Follow Allison Gatlin on X, the platform formerly known as Twitter, at @IBD_AGatlin.
