While the first few months of the year witnessed volatility driven by increasing interest rates, an economic downturn, ongoing geopolitical uncertainties, regulatory changes under the Inflation Reduction Act, and persistent supply chain disruptions, biotech manufacturers are steadily regaining stability.
With this in mind, it could be wise to monitor notable biotech stocks: Moderna, Inc. (MRNA), MacroGenics, Inc. (MGNX), and Amicus Therapeutics, Inc. (FOLD). Before we delve into the highlighted stocks, let's explore the current landscape in the biotech industry.
Nearly 50% of surveyed life sciences executives, as per Deloitte Global, maintain optimism for the 2023 sector outlook. This optimism stems from their unwavering faith in medicine demand, the perceived worth of M&A activities, both large and small, and their self-assured capability to sustain transformation, fostering impact and value.
Furthermore, the growth of personalized medicine and the emergence of orphan drug formulations are offering new avenues for biotech firms. Additionally, cutting-edge medical technologies such as 3D bioprinting are being harnessed, contributing to the expansion and advancement of the biotech industry.
The sector is also expected to grow with the aid of AI and big data, crucial technologies in drug development. AI's versatility supports genetic risk assessment, disease diagnosis, drug discovery, clinical trials, precision medicine, and treatment monitoring, enhancing biotech's prospects.
Going forward, the global biotechnology market is projected to grow at a CAGR of 14.2% and reach $2.78 trillion by 2030, as per a report by Vantage Market Research.
In light of these encouraging trends, let's look at the fundamentals of the three leading Biotech stocks, beginning with number 3.
Stock #3: Moderna, Inc. (MRNA)
MRNA pioneers therapeutic and vaccine development for infectious diseases, immuno-oncology, rare diseases, autoimmune, and cardiovascular conditions, both autonomously and in collaboration. The company boasts a robust pipeline of 45 candidates in 48 programs, with 38 currently undergoing clinical trials.
On August 17, MRNA unveiled the preliminary clinical trial results for its fall 2023 COVID-19 vaccine, demonstrating a substantial increase in neutralizing antibodies against EG.5 and FL.1.5.1 variants. This achievement could help drive increased vaccine demand and sales for MRNA's products.
On July 26, MRNA and Merck & Co., Inc. (MRK) commenced a pivotal Phase 3 randomized trial, V940-001, to assess V940, an investigational personalized neoantigen therapy (INT). The trial combines V940 with KEYTRUDA, MRK’s anti-PD-1 therapy, as an adjuvant treatment for patients with surgically removed high-risk melanoma.
Successful development and approval of V940 could lead to lucrative revenue streams, bolstering MRNA's market position and shareholder value in the growing field of personalized neoantigen therapies.
For the six months that ended June 30, 2023, MRNA’s interest income increased 287.3% year-over-year to $213 million. Its cash inflow from investing activities came in at $3.96 billion, compared to a cash outflow of $5.07 billion in the prior year’s period.
In addition, as of June 30, 2023, the company’s cash and cash equivalents stood at $3.80 billion, compared to $3.21 billion as of December 31, 2022. Its total current assets amounted to $10.60 billion as of June 30, 2023.
The stock has plunged 1.6% over the past five days, closing the last trading session at $113.07.
MRNA’s fundamentals are apparent in its POWR Ratings. The stock has an overall rating of C, equating to Neutral in our proprietary rating system. The POWR Ratings are calculated by considering 118 different factors, each weighted to an optimal degree.
MRNA has a B grade for Value. It has ranked #158 in the 375-stock Biotech industry.
In addition to the POWR Ratings I’ve just highlighted, you can see MRNA’s ratings for Growth, Sentiment, Momentum, Quality, and Stability here.
Stock #2: MacroGenics, Inc. (MGNX)
MGNX develops and commercializes monoclonal antibody-based cancer treatments. It sources its product candidates primarily from versatile antibody technology platforms with wide therapeutic applications. The company is working on product candidates targeting tumor-associated antigens and immune checkpoint molecules.
On March 22, MGNX reported that it would receive a $15 million milestone payment from Incyte Corporation (INCY) following the U.S. Food and Drug Administration’s (FDA) approval of ZYNYZ™, a PD-1 targeting antibody. ZYNYZ originated from MGNX's collaboration with INCY, marking the third successful product approval from MGNX's portfolio.
The FDA approval enhances MGNX's financial standing, offering the potential for increased investments in research and development. The milestone payment reflects MGNX's dedication to medical progress and reinforces its position in the biopharmaceutical industry.
For the second quarter that ended June 30, 2023, MGNX’s net income and net income per common share stood at $57.47 million and $0.92, compared to a loss and loss per common share of $41.30 million and $0.67 in the prior year’s period, respectively.
As of June 30, 2023, the company’s cash, cash equivalents, and marketable securities came in at $240.34 million, compared to $154.35 million as of December 31, 2022. Its total assets amounted to $305.65 million, compared to $280.47 million as of December 31, 2022.
The company’s revenue for the fiscal third quarter ending September 2023 is expected to increase 24.9% year-over-year to $52.12 million. Over the past year, the stock has gained 17.4%, closing the last trading session at $4.66.
MGNX’s prospects are reflected in its POWR Ratings. The stock has an overall rating of C, which translates to Neutral in our proprietary rating system.
MGNX has an A grade for Value and a B for Quality. It is ranked #29 in the 375-stock Biotech industry.
Click here to access the additional MGNX ratings (Growth, Momentum, Sentiment, and Stability).
Stock #1: Amicus Therapeutics, Inc. (FOLD)
FOLD researches, creates, and provides medications for rare diseases. The company innovates in treating Pompe disease with AT-GAA, and enzyme replacement therapies for Pompe diseases. Notably, it offers Galafold, an oral precision medicine for confirmed Fabry disease in adults with a compatible gene variant, validated by in vitro assay data.
On August 15, FOLD unveiled that the Medicines and Healthcare Products Regulatory Agency (MHRA) of the United Kingdom has granted marketing authorizations for Pombiliti® (cipaglucosidase alfa) + Opfolda® (miglustat), offering new hope to adults afflicted by late-onset Pompe disease within the United Kingdom.
The approval not only solidifies FOLD's position as a leading provider of groundbreaking medical therapies but also opens up a broader patient base, potentially translating into enhanced revenue streams and improved financial performance for the company.
For the second quarter that ended June 30, 2023, FOLD’s net product sales increased 17.1% year-over-year to $94.50 million. Its gross profit grew 17.7% from the year-ago value to $85.39 million.
As of June 30, 2023, FOLD’s cash and cash equivalents stood at $211.31 million, compared to $148.81 million as of December 31, 2022. Moreover, its total assets came in at $730.09 million, compared to $724.17 million as of December 31, 2022.
The consensus revenue estimate of $537.61 million for the fiscal year ending December 2024 reflects a 34.2% year-over-year growth. Likewise, analysts expect the company’s EPS to come in at $0.13, up 131% year-over-year. FOLD’s shares have gained 14.2% over the past year to close the last trading session at $12.82.
FOLD’s outlook is apparent in its POWR Ratings. The stock has an overall rating of C, which translates to Neutral in our proprietary rating system.
FOLD has an A grade for Growth. It is ranked #28 out of 375 stocks within the same industry.
Click here to access additional FOLD ratings for Value, Sentiment, Momentum, Stability, and Quality.
What To Do Next?
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MRNA shares were trading at $111.82 per share on Friday afternoon, down $1.25 (-1.11%). Year-to-date, MRNA has declined -37.75%, versus a 18.67% rise in the benchmark S&P 500 index during the same period.
About the Author: Aanchal Sugandh
Aanchal's passion for financial markets drives her work as an investment analyst and journalist. She earned her bachelor's degree in finance and is pursuing the CFA program. She is proficient at assessing the long-term prospects of stocks with her fundamental analysis skills. Her goal is to help investors build portfolios with sustainable returns.
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