The biotechnology market experiences substantial growth, driven by innovative technologies and underscored by notable advancements in molecular diagnostics. Therefore, investors could consider investing in top biotech stocks Equillium, Inc. (EQ), United Therapeutics Corporation (UTHR), and Vertex Pharmaceuticals Incorporated (VRTX) for weekly end-of-year profits.
The global pharmaceutical manufacturing sector's growth is further fueled by a shift toward single-use disposable solutions, smart operations, and a focus on personalized medicine, prompting a restructuring of supply chains to align with patient-centric healthcare models. The market is expected to grow at a CAGR of 7.6% from 2023 to 2030.
This is supporting the growth of the biotechnology market. The share of biotech in the global drug market is increasing rapidly. In 2012, global sales from biotech drugs stood at $149 billion. Moreover, this volume is projected to increase to over $430 billion in 2022 and 2023.
Looking ahead, the surge of biotech is marked by the need for novel therapies and trends such as CAR-T cell therapy, RNA-based therapeutics, stem and cell therapies, and AI-driven advanced analytics. The global biotechnology market size is expected to grow at a CAGR of 14% to reach $3.88 trillion by 2030.
Considering these conducive trends, let’s examine the fundamentals of the three Biotech stock picks, beginning with the third choice.
Stock #3: Equillium, Inc. (EQ)
EQ is a biotech company specializing in treatments for severe autoimmune disorders. The company's lead product, itolizumab (EQ001), is in Phase III trials for acute graft-versus-host disease. It also has projects for conditions like cutaneous T cell lymphoma and alopecia areata.
On November 13, EQ presented promising results from the EQUALISE study at the American College of Rheumatology's annual meeting. The study, evaluating itolizumab for lupus nephritis, demonstrated high response rates, rapid reduction in proteinuria, and a favorable safety profile.
This data, part of a strategic partnership with Ono Pharmaceutical, suggests potential efficacy and tolerability in treating lupus nephritis compared to standard care, with noteworthy comparisons to a voclosporin study.
For the third quarter, which ended September 30, 2023, EQ reported revenue of $8.87 million. The company's general and administrative expenses and total operating expenses decreased 21.2% and 5.6% from the previous-year quarter to $3.52 million and $12.49 million, respectively. As of September 30, 2023, its total liabilities amounted to $31.12 million, compared to $46.48 million as of December 31, 2022.
Street expects EQ's revenue to grow 108.2% year-over-year to $32.82 million for the fiscal year ending December 2023. Its EPS is expected to improve 77.6% from the previous year. The company surpassed the revenue estimates in each of the trailing four quarters, which is impressive.
EQ’s shares have gained 13.4% over the past nine months and 28.3% over the past month to close the last trading session at $0.64.
EQ’s POWR Ratings reflect its positive prospects. The stock has an overall rating of B, equating to a Buy in our proprietary rating system. The POWR Ratings are calculated by considering 118 different factors, with each factor weighted to an optimal degree.
EQ has a B grade for Growth, Value, Sentiment, and Quality. Within the Biotech industry, it is ranked #17 among 393 stocks.
In addition to the POWR Ratings stated above, one can access EQ’s additional Momentum and Stability ratings here.
Stock #2: United Therapeutics Corporation (UTHR)
UTHR is a biotechnology company specializing in developing and commercializing therapies for chronic and life-threatening diseases globally. Its portfolio includes products for pulmonary arterial hypertension, high-risk neuroblastoma, and idiopathic pulmonary fibrosis.
On October 30, UTHR acquired Miromatrix Medical Inc. (MIRO) for approximately $91 million through a cash tender offer of $3.25 per share at closing, along with an additional $1.75 per share upon achieving a clinical development milestone for Miromatrix's miro kidney™ by December 31, 2025. The acquisition enhances UTHR's organ manufacturing programs to tackle the shortage of transplantable organs.
In the third quarter ended September 30, 2023, UTHR generated total revenues of $609.40 million, up 18.1% year-over-year. The company's operating income and net income grew 4% and 11.8% from the previous-year quarter to $327 million and $267.60 million, respectively.
Its net income per common share increased 9.6% from the prior year's quarter to $5.38.
UTHR’s revenue and EPS are expected to grow 17.5% and 58.9% year-over-year to $577.50 million and $4.24 for the fourth quarter ending December 2023, respectively. The company surpassed the EPS estimates in three of the trailing four quarters.
UTHR’s shares increased 8.7% over the past three months and 9.9% over the past month to close the last trading session at $244.86.
UTHR’s POWR Ratings reflect this sound outlook. The stock has an overall rating of B, equating to a Buy in our proprietary rating system.
The stock has a B grade for Value, Sentiment, and Quality. Within the same industry, it is ranked #11.
Click here for UTHR’s additional Growth, Momentum, and Stability ratings.
Stock #1: Vertex Pharmaceuticals Incorporated (VRTX)
VRTX is a biotech company focused on developing and commercializing therapies for Cystic Fibrosis (CF). The company portfolio includes products like TRIKAFTA/KAFTRIO, SYMDEKO/SYMKEVI, ORKAMBI, and KALYDECO. Its pipeline covers treatments for CF, pain, sickle cell disease, beta thalassemia, AAT deficiency, Type 1 Diabetes, and cancer.
On December 11, VRTX presented positive and durable results for CASGEVY™ in global trials for sickle cell disease and transfusion-dependent beta thalassemia, with FDA approval for severe SCD and ongoing investigation for TDT.
On November 24, VRTX announced that the European Medicines Agency (EMA) had validated a Type II variation application for the Marketing Authorization of KAFTRIO® in combination with ivacaftor, aiming to expand its approved indication for people with cystic fibrosis and responsive rare mutations, including the N1303K mutation.
During the third quarter, which ended September 30, 2023, VRTX’s net product revenues increased 6.4% from the prior-year quarter to $2.48 billion. Its non-GAAP net income and net income per diluted common share amounted to $1.06 billion and $4.08, up 2.3% and 1.7% year-over-year, respectively.
As of September 30, 2023, its total assets amounted to $21.73 billion, compared to the total assets of $18.15 billion as of December 31, 2022.
The company anticipates its product revenue to be approximately $9.85 billion for the fiscal year 2023. Furthermore, the company anticipates its adjusted EBITDA to range between $42 million and $45 million, surpassing the earlier guidance of $38 million to $41 million.
Analysts expect VRTX’s revenue and EPS to grow 9.4% and 8.4% year-over-year to $2.52 billion and $4.07 for the fourth quarter ending December 2023. The company surpassed the EPS estimates in each of the trailing four quarters.
The stock has gained 24% over the past nine months and 23.4% year-to-date to close the last trading session at $256.29.
VRTX’s robust fundamentals are reflected in its POWR Ratings. The stock has an overall rating of A, equating to a Strong Buy in our proprietary rating system.
It has an A grade for Quality and a B for Value and Sentiment. Within the same industry, it is ranked #3.
To see VRTX’s additional POWR Ratings for Growth, Momentum, and Stability, click here.
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VRTX shares were trading at $355.78 per share on Tuesday morning, down $0.51 (-0.14%). Year-to-date, VRTX has gained 23.20%, versus a 22.32% rise in the benchmark S&P 500 index during the same period.
About the Author: Kritika Sarmah
Her interest in risky instruments and passion for writing made Kritika an analyst and financial journalist. She earned her bachelor's degree in commerce and is currently pursuing the CFA program. With her fundamental approach, she aims to help investors identify untapped investment opportunities.
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