The biotech industry plays a crucial role in advancing healthcare by developing innovative therapies and technologies that address unmet medical needs. With positive results from clinical trials, several biotech companies are on the verge of significant breakthroughs. As a result, these companies have the potential to generate substantial value for investors.
Given the backdrop, it could be wise to invest in the fundamentally sound stocks Amicus Therapeutics, Inc. (FOLD), POINT Biopharma Global Inc. (PNT), and Precision BioSciences, Inc. (DTIL). By considering these stocks, investors may position themselves to benefit from the growth and potential success of these biotech companies.
Thanks to the advent of innovative and advanced technologies, significant investments & government initiatives favoring the biotechnology industry, and rising demand from an aging population, the global biotechnology market is expected to reach $3.88 trillion by 2030, exhibiting a CAGR of 14%.
Another factor fueling growth is the increased demand for personalized medicines, which comes with the benefits of individualized testing and treatments, prevention and early detection, and the ability to reduce side effects. The global personalized medicine market is expected to reach approximately $5.7 trillion by 2030, poised to grow at an 11.6% CAGR.
While the biotech sector is not immune to short-term fluctuations and challenges, such as clinical trial setbacks or regulatory hurdles, the long-term prospects remain positive due to its non-cyclical nature as a healthcare component.
With that being said, let us evaluate the fundamentals of the above-mentioned stocks in detail.
Amicus Therapeutics, Inc. (FOLD)
FOLD is a biotechnology company that focuses on discovering, developing, and delivering medicines for rare diseases. Its commercial product and product candidates include Galafold, an approved oral precision medicine for the treatment of adults with Fabry disease. The company also develops AT-GAA, a clinical-stage treatment paradigm for Pompe disease.
On April 26, FOLD announced that it had received a positive opinion from the Committee for Medicinal Products for Human Use (CHMP) of the European Medicines Agency (EMA) for its investigational drug miglustat, the enzyme stabilizer component of AT-GAA, which is a combination therapy for the treatment of Pompe disease.
The recommendation of a marketing authorization for miglustat could add to the company’s revenue stream in the future.
FOLD’s net product sales increased 9.6% year-over-year to $86.27 million in the first quarter (ended March 31, 2023), while its gross profit rose 11.5% from the year-ago value to $79.33 million. Its total operating expenses declined 20.1% from the prior-year quarter to $116.96 million.
During the same period, its cash and cash equivalents amounted to $160.60 million, up 7.9% compared to $148.81 million as of December 31, 2022.
Street expects FOLD’s revenue to increase 8.5% year-over-year to $87.57 million for the second quarter (ending June 30, 2023), while its EPS is expected to improve by 40.7% from the prior-year period.
In terms of trailing-12-month FOLD’s gross profit margin of 88.73% is 58.9% higher than the industry average of 55.84%. Moreover, the company’s trailing-12-month asset turnover ratio of 0.44x is 24.7% higher than the 0.35x industry average.
Moreover, its revenue grew at a CAGR of 17.3% and 46.8% over the past three and five years, respectively.
The stock has gained 52.1% over the past year to close the last trading session at $11.80.
FOLD’s POWR Ratings reflect this promising outlook. The stock has an overall B rating, which translates to Buy in our proprietary rating system. The POWR Ratings assess stocks by 118 different factors, each with its own weighting.
It has a B grade for Growth, Value, Momentum, and Quality. In the 378-stock Biotech industry, it is ranked #21. To see additional POWR Ratings of FOLD for Stability and Sentiment, click here.
POINT Biopharma Global Inc. (PNT)
PNT is a radiopharmaceutical company that develops and commercializes radioligands that fight cancer. Its pipeline consists of late-stage programs in prostate cancer (PNT2002) and neuroendocrine tumors (PNT2003).
On May 15, PNT entered into a collaboration with IONETIX Corporation, a leading cyclotron technology and isotope manufacturing company. The collaboration aims to establish a new subsidiary called Ionetix Alpha Corp. (Ionetix-α), which will focus on the commercial-scale production of therapeutic isotopes, specifically actinium-225 (225Ac), meeting Good Manufacturing Practice (GMP) standards.
PNT’s Chief Executive Officer Dr. Joe McCann, said, “With this investment, POINT is demonstrating its ongoing commitment to overcoming the barriers that have historically limited radioligand development, positioning us uniquely in this emerging high potential therapeutic modality.”
On April 4, Eckert & Ziegler, in collaboration with a subsidiary of PNT, entered into an agreement for the supply of non-carrier-added Actinium-225 (Ac-225). Under this agreement, Eckert & Ziegler will deliver specified quantities of Good Manufacturing Practice (GMP) grade Ac-225 to PNT.
The supplied Ac-225 is expected to be utilized by PNT to develop the pipeline of next-generation Ac-225-based radioligands.
For the first quarter that ended March 31, 2023, PNT’s revenue amounted to $9.46 million, while its total other income grew significantly from the year-ago value to $5.69 million. During the same period, its total current liabilities amounted to $77.85 million compared to $79.74 million for the period that ended December 31, 2022.
Additionally, its total assets have grown at a significant CAGR over the past three years.
Analysts expect PNT’s revenue for the fiscal year 2024 to be $78.04 million, representing 690.3% year-over-year growth. The company’s EPS is expected to increase 32.3% year-over-year for the next year. Additionally, it surpassed EPS estimates in three of the trailing four quarters.
PNT’s trailing-12-month EBITDA margin of 51.30% is significantly higher than the 1.79% industry average. Moreover, its trailing-12-month gross profit margin of 100% is 79.1% higher than the industry average of 55.84%.
Over the past year, the stock has gained 56.7% to close the last trading session at $10.20.
PNT’s strong fundamentals are reflected in its POWR Ratings. It has an overall rating of B, which equates to Buy in our proprietary rating system.
It has a B grade for Value and Sentiment. Within the same industry, it is ranked #30. Click here to see the other ratings of PNT for Growth, Momentum, Stability, and Quality.
Precision BioSciences, Inc. (DTIL)
DTIL is a clinical-stage gene editing company that develops ex vivo allogeneic Chimeric Antigen Receptor (CAR) T immunotherapies and in vivo therapies for genetic and infectious diseases with the application of its owned ARCUS genome editing platform.
DTIL’s revenue increased 164.7% year-over-year to $8.78 million in the first quarter (ended March 31, 2023), while its cash and cash equivalents came in at $158.13 million. Also, its total liabilities of $164.33 million declined 7.5% from $177.74 million for the period ended December 31, 2022.
Analysts expect DTIL’s revenue to increase 101.8% year-over-year to $7.71 million for the second quarter (ending June 30, 2023), while its EPS is expected to improve by 45.7% in the same period. Moreover, it surpassed the consensus EPS estimates in each of the trailing four quarters, which is impressive.
The stock’s trailing-12-month gross profit margin of 100% is 79.1% higher than the 55.84% industry average. Likewise, its trailing-12-month CAPEX/Sales of 9.89% compares to the industry average of 4.70%.
Also, DTIL’s revenue grew at a CAGR of 8.7% and 31.1% over the past three and five years, respectively.
The stock has gained 5.7% over the past five days to close the last trading session at $0.78.
It’s no surprise that DTIL has an overall rating of B, which equates to Buy in our proprietary rating system. It has a B grade for Growth, Momentum, and Sentiment. Out of 378 stocks in the same industry, it is ranked #28.
In addition to the POWR Ratings we stated above, we also have DTIL ratings for Value, Stability, and Quality. Get all DTIL ratings here.
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FOLD shares were trading at $12.05 per share on Tuesday morning, up $0.25 (+2.12%). Year-to-date, FOLD has declined -1.31%, versus a 9.54% rise in the benchmark S&P 500 index during the same period.
About the Author: Shweta Kumari
Shweta's profound interest in financial research and quantitative analysis led her to pursue a career as an investment analyst. She uses her knowledge to help retail investors make educated investment decisions. More...
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