The biotechnology industry has witnessed solid growth over the past year with rising demand for treatments and vaccines to fight COVID-19. Now that the global vaccination drive is in full flight, biotech companies are working on their research and development projects to advance new therapies to cure or moderate other critical diseases. Investor optimism in the biotech industry is evident in the VanEck Vectors Biotech ETF’s (BBH) 16.8% returns over the past six months.
Furthermore, given the ageing population in the United States and other Western countries–and with that an implied need for more healthcare solutions in the future–the biotechnology industry is poised for solid growth in coming years. Indeed, the global biotechnology market is expected to grow at a 15.5% CAGR over the next seven years to hit $850.5 billion by 2027.
Wall Street analysts believe budding biotech stocks Bionano Genomics, Inc. (BNGO), Cerus Corporation (CERS), Agenus Inc. (AGEN), and VBI Vaccines Inc. (VBIV) have the potential to rally by more than 60% in the next 12 months.
Bionano Genomics, Inc. (BNGO)
BNGO operates as a life sciences instrumentation company in the genome analysis space. Its products include Saphyr, Bionano Chips, Bionano Prep Kits, and Bionano Data Solutions, which are sold for research use applications primarily to laboratories associated with academic and governmental research institutions, as well as to pharmaceutical, biotechnology, and contract research companies worldwide.
Last month, BNGO announced the publication of its successful Saphyr-based method to analyze DNA replication in human genomes at a higher coverage level. The company expects this publication could help support new levels of cancer research and drug discovery in future and exemplify the importance of optical genome mapping. And this month, the U.S. Patent and Trademark Office issued a BNGO a patent, titled ‘Methods and Devices for Single-Molecule Whole Genome Analysis’ that provides further protection for BNGO’s methods to characterize single DNA molecules and strengthens its global patent portfolio.
For its fiscal 2021 first quarter, ended March 31, the company’s total revenue increased 178.9% year-over-year to $3.17 million. Its revenue from its product segment increased 108.4% year-over-year to $2.05 million. The increase in product sales was driven by increased demand for BNGO’s reagent rental program and consumables. The company’s gross profit was $1.04 million for the quarter, which represents a 272.5% gain from the prior-year period. As of March 31, BNGO had cash and cash equivalents of $362 million. Its increase in cash is due to an equity offering that was completed in January.
Analysts’ consensus revenue estimate of $3.55 million for the current quarter represents a 200.7% rise on a year-over-year basis. BNGO stock has gained 1357.5% over the past year and 976.6% over the past six months. BNGO closed yesterday’s trading session at $5.62.
All three Wall Street analysts who analyzed the stock rated it a ‘Buy.’ They expect the stock to hit $12 in the near term, which indicates a potential 113.5% upside.
Cerus Corporation (CERS)
CERS is a biomedical products company engaged in the research and development of systems designed to enhance the safety of blood transfusions. The company’s platform technologies prevent viral, bacterial, and cellular replication.
On May 17, CERS announced its contract with Canadian Blood Services for its INTERCEPT Blood System for Platelets. The contact marks CERS’ first entry into the Canadian markets.
CERS and Shandong Zhongbaokang Medical Implements Co. Ltd. (ZBK) formed a joint venture in February to develop, obtain regulatory approval for, manufacture and commercialize the INTERCEPT Blood System for platelets and red blood cells in China. The company hopes ZBK’s experience with local clinical and regulatory requirements, ISO-certified manufacturing infrastructure, and existing sales channels will facilitate accelerated and broad access to INTERCEPT across China’s transfusion medicine community.
CERS’ total revenue was $29.60 million for its fiscal year 2021 first quarter, ended March 31, which represents a 20.3% improvement year-over-year. Its revenue from the product segment increased 25.6% year-over-year to $23.38 million. Its product revenue growth has benefited from increased demand for INTERCEPT platelet products in the U.S., led by its adoption by the country’s top five blood center networks. CERS’ gross profit was $12.28 million, up 19.4% from the prior-year period. As of March 31, CERS had cash and cash equivalents of 57.61 million.
A $31.48 million consensus revenue estimate for the current quarter, ending June 30, represents a 17.3% rise from the prior-year period. The stock has rallied 6.4% over the past year to close yesterday’s trading session at $5.86.
Wall Street analysts expect the stock to hit $9.50 in the near term, which indicates a potential 62.1% upside.
Agenus Inc. (AGEN)
AGEN is a clinical-stage immuno-oncology company that develops and commercializes technologies to treat cancers and infectious diseases. The company’s discovery pipeline includes a range of checkpoint modulating (CPM) antibodies.
On May 18, AGEN and Bristol-Myers Squibb Company (BMY) agreed that BMY will be granted a global exclusive license to AGEN’s proprietary bispecific antibody program, AGEN1777. Because BMY will be solely responsible for AGEN1777’s and other products’ commercialization, AGEN will receive a $200 million upfront payment and $1.36 billion in development, regulatory and commercial milestones in addition to tiered double-digit royalties on net product sales.
As of March 31, the company had cash and cash equivalents of $119.37 million. Its cash used in operations for the fiscal 2021 first quarter ended March 31 was $42.74 million, compared to $35 million for the first quarter, ended March 31, 2020.
For the next quarter, ending September 30, analysts expect AGEN’s revenue to be $15.93 million, which represents a 13.8% rise from the prior-year period. The stock has gained 67.2% over the past year and 56.3% over the past month to close yesterday’s trading session at $4.18. It has gained 71.3% since hitting its 52-week low of $2.44.
Wall Street analysts expect the stock to hit $7.50 in the near term, which indicates a 79.4% potential upside. Also, all three Wall Street analysts covering the stock have rated it ‘Buy.’
VBI Vaccines Inc. (VBIV)
VBIV is a biopharmaceutical company that develops and sells vaccines for the treatment of infectious diseases and immuno-oncology. The company develops vaccine platforms and products for licensing to pharmaceutical companies and biotechnology companies. It serves primarily physicians and pharmacists through direct sales.
VBIV and Coalition for Epidemic Preparedness Innovations (CEPI) have partnered in March to develop VBIV’s enveloped virus like particle (eVLP) vaccine candidates against SARS-CoV-2 variants. CEPI will provide up to $33 million to support the advancement of VBI-2905 through Phase 1 clinical development. This funding will also support preclinical expansion of additional multivalent vaccine candidates designed to evaluate the potential breadth of VBIV’s eVLP technology.
VBIV’s revenue for its fiscal 2021 first quarter, ended March 31, was $301,000, up 50.5% from the fourth quarter of 2020. Its cash used in operating activities decreased 13.2% year-over-year to $6.60 million. This decrease resulted from a change in operating working capital and notably from the cash it received in advance from the CEPI funding agreement. The company had cash and cash equivalents of $108.23 million as of March 31, 2021.
Analysts expect VBIV’s revenue to be $472,000 for the current quarter, ending June 30, 2021, which represents a 156.5% rise year-over-year. VBIV has gained 28.5% over the past year and 22.6% over the past month. VBIV ended yesterday’s trading session at $3.20.
All five Wall Street analysts that rated the stock rated it ‘Buy.’ Furthermore, , the analysts expect the stock to hit $6.60 in the near term, indicating a potential 106.3% upside.
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BNGO shares were trading at $5.61 per share on Friday afternoon, down $0.01 (-0.18%). Year-to-date, BNGO has gained 82.14%, versus a 11.62% rise in the benchmark S&P 500 index during the same period.
About the Author: Sweta Vijayan
Sweta is an investment analyst and journalist with a special interest in finding market inefficiencies. She’s passionate about educating investors, so that they may find success in the stock market. More...
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