HRMY: 3 Under-the-Radar Biotech Stocks Revolutionizing Healthcare

The biotech industry is brimming and making strides in personalized medicine and treatments for rare diseases. Biotech firms are leveraging cutting-edge technologies like gene editing, CRISPR, and AI to create tailored therapies that address specific genetic profiles and unmet medical needs.

Given this backdrop, investors could consider buying these fundamentally sound biotech stocks, Immunocore Holdings plc (IMCR), BioCryst Pharmaceuticals, Inc. (BCRX), and Harmony Biosciences Holdings, Inc. (HRMY) that are diving into the innovations.

Personalized medicine continues gaining traction to improve treatment efficacy and reduce side effects. However, it is to be said that precision medicine has the potential to drive down healthcare costs by reducing the need for ineffective treatments and hospitalizations. Hence, small biotech firms are leading this innovation, focusing on creating therapies that target individual patient needs rather than adopting a one-size-fits-all approach.

Rare disease treatments are another area where these biotech companies excel. Developing therapies for conditions with limited existing options not only addresses critical medical gaps but also opens lucrative market opportunities. The rare disease clinical trial market is projected to reach nearly $32 billion by 2033, growing at a CAGR of 9.7%.

As per the Deloitte analysis, AI investments by biopharma companies over the next five years could generate up to 11% in value relative to revenue across functional areas. The integration of technologies like gen AI and the increased use of data are expected to boost operational efficiencies and drive breakthrough innovations.

As healthcare systems increasingly prioritize innovation, these biotech companies are positioned to capitalize on the demand for groundbreaking treatments. Further, the global biotechnology market is anticipated to reach $3.88 trillion by 2030, exhibiting a CAGR of 13.9%.

Therefore, let’s delve into the fundamentals of the top three Biotech stocks, beginning with the third choice.

Stock #3: Immunocore Holdings plc (IMCR)

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Based in Abingdon, the United Kingdom, IMCR is a commercial-stage biotechnology company that is engaged in the development of TCR bispecific immunotherapies, ImmTAX, which immunes mobilizing monoclonal TCRs Against X disease, designed to treat a range of diseases, including cancer, autoimmune and infectious disease.

In terms of forward EV/Sales, IMCR is trading at 3.42x, 0.8% lower than the industry average of 3.45x.

During the third quarter that ended September 30, 2024, IMCR reported total revenue of $80.25 million, reflecting an increase of 23.7% year-over-year. Its net income and earnings per share came in at $8.74 million and $0.17 per share, up 864.2% and 750% year-over-year, respectively.

Analysts expect IMCR’s revenue for the fourth quarter (ended December 2024) to increase 17.1% year-over-year to $82.20 million. For the fiscal year 2024, its revenue is expected to increase 20.9% year-over-year to $301.72 million.

IMCR’s revenue has grown at a CAGR of 100.7% over the past three years. Likewise, the company’s total assets have increased at a CAGR of 34.8% over the past five years.

IMCR shares have gained 7.4% over the past month to close the last trading session at $30.

IMCR’s bright prospects are reflected in its POWR Ratings. The stock has an overall rating of B, which translates to Buy in our proprietary rating system. The POWR Ratings are calculated by considering 118 different factors, with each factor weighted to an optimal degree.

It also has a B grade for Growth, Value, and Quality. Among the 337 stocks in the Biotech industry, it is ranked #24. Click here to see IMCR’s ratings for Momentum, Stability, and Sentiment.

Stock #2: BioCryst Pharmaceuticals, Inc. (BCRX)

BCRX is a biotechnology company focused on improving the lives of people living with complement-mediated and other rare diseases. The company markets peramivir injection, an intravenous neuraminidase inhibitor for the treatment of acute uncomplicated influenza, under the RAPIVAB, RAPIACTA, and PERAMIFLU names.

On November 18, BCRX announced that the Health Services Executive (HSE) in Ireland recommended ORLADEYO® (berotralstat) for the routine prevention of recurrent attacks of hereditary angioedema (HAE) in eligible patients aged 12 years and older. This launch in Ireland is the first oral, once-daily therapy for the reduction of recurrent HAE attacks in Ireland.

On September 30, BCRX was awarded a $69 million contract by the U.S. Department of Health and Human Services for the procurement of up to 95,625 doses over a five-year period of RAPIVAB® (peramivir injection) for treating influenza.

In terms of forward Price/Sales, BCRX is trading at 3.43x, 4.7% lower than the industry average of 3.61x.

For the fiscal third quarter, which ended on September 30, 2024, BCRX’s total revenues increased 35% year-over-year to $117.08 million. The company’s adjusted income from operations grew significantly from the prior year to $24.94 million.

Street expects BCRX’s revenue for the fourth quarter (ended December 2024) to grow 40.4% year-over-year to $131.10 million. Its revenue for the fiscal year 2024 is expected to grow 35.9% year-over-year to $450.36 million.

Over the past three and five years, BCRX’s revenue income grew at CAGRs of 535% and 103.4%, respectively, while its total assets grew at 40.3% CAGR over the past five years.

Over the past nine months, the stock has gained 69.5%, closing the last trading session at $7.61.

It’s no surprise that BCRX has an overall B rating, equating to a Buy in our POWR Ratings system. It has a B grade for Growth, Value, and Quality. Within the same industry, it is ranked #11.

Beyond what is stated above, we’ve also rated BCRX for Momentum, Stability, and Sentiment. Get all BCRX ratings here.

Stock #1: Harmony Biosciences Holdings, Inc. (HRMY)

HRMY is a commercial-stage pharmaceutical company that focuses on developing and commercializing therapies for patients living with rare neurological diseases as well as patients living with other neurological diseases who have unmet medical needs. It offers WAKIX (pitolisant), a molecule with a novel mechanism of action to treat excessive daytime sleepiness in adult patients with narcolepsy.

In terms of forward EV/Sales, HRMY is trading at 2.80x, which is 18.7% lower than the industry average of 3.45x. The stock’s forward Price/Cash Flow ratio of 12.14x is 26.6% below the industry average of 16.54x. Also, its forward EV/EBITDA multiple of 8.76 compares to the industry average of 12.84x.

HRMY ’s net product revenue for the third quarter (ended September 30, 2024) increased by 16.1% from the year-ago value to $425.23 million. Its gross profit rose 11.9% from the prior-year quarter to $143.26 million. The company’s non-GAAP adjusted net income came in at $59.59 million or $1.03 per share, reflecting increases of 1.4% and 6.2% from the prior year’s quarter.

The consensus revenue estimate of $200.85 billion for the fiscal fourth quarter (ended December 2024) represents a 19.3% increase year-over-year. The consensus EPS estimate of $0.72 for the about-to-be-reported quarter indicates a 59.8% improvement year-over-year. The company has an excellent surprise history; it surpassed the consensus revenue estimates in each of the trailing four quarters.

Moreover, HRMY’s revenue and diluted EPS have grown at CAGRs of 36.1% and 120.7% over the past three years, respectively. In addition, its EBIT increased at 38% CAGR over the past three years.

The stock has gained 35.1% over the past nine months and 25.4% over the past year to close the last trading session at $40.46.

HRMY’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall rating of B, which translates to a Buy in our proprietary rating system.

HRMY has an A grade for Value and Quality. Out of 337 stocks in the same industry, it is ranked #10. Click here to access the other HRMY ratings for Growth, Momentum, Stability, and Sentiment.

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HRMY shares were trading at $38.88 per share on Wednesday afternoon, down $1.58 (-3.91%). Year-to-date, HRMY has gained 12.99%, versus a 3.57% rise in the benchmark S&P 500 index during the same period.