The biotech industry is fueled by the growing adoption of AI technologies by pharmaceutical organizations and a growing focus on the development of personalized medicines.
Increasing cases of target diseases and genetic disorders, along with advancements in PCR technologies and portable instruments, are fueling progress in the biotech industry. The global biotechnology market is poised to grow at a CAGR of 8.7% until 2030.
Additionally, as biopharmaceutical companies’ growing adoption of AI technologies has reduced the cost of the drug delivery process, AI solutions have emerged as a tool for pharmaceutical organizations to enhance their footprint in the industry. The artificial intelligence in biotechnology market is anticipated to grow at a CAGR of 29.7% until 2032.
Apart from this, the concept of personalized medicine, tailored to an individual’s genetic makeup, is gaining traction in the biotechnology market. The convergence of biotechnology with information technology, known as bioinformatics, that enhances data-driven insights for research and development is propelling market growth.
With these favorable trends in mind, let’s delve into the fundamentals of the three best Biotech stocks, beginning with the third choice.
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.
On September 11, 2023, MRNA and Immatics N.V. (IMTX), a clinical-stage biopharmaceutical company active in the discovery and development of T cell-redirecting cancer immunotherapies, announced a strategic research and development collaboration to pioneer novel and transformative therapies for cancer patients with high unmet medical need.
This broad multi-platform collaboration will leverage the deep scientific expertise and core operational capabilities of both companies, combining Immatics’ TCR platform with MRNAa’s cutting-edge mRNA technology, and span various therapeutic modalities, including bispecifics, cell therapy, and cancer vaccines.
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.
MRNA’s trailing 12-month levered FCF margin of 1.75% is 574.5% higher than the 0.26% industry average. Its trailing 12-month EBIT margin of 4.82% is significantly higher than the 0.42% industry average.
MRNA’s total revenue for the fiscal second quarter that ended June 30, 2023, came in at $344 million. 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 quarter.
The company’s revenue for the fiscal third quarter ending September 2023 is expected to be $1.61 billion. Also, the company has surpassed revenue estimates in three of the trailing four quarters, which is impressive.
Over the past month, the stock has plunged 9.8%, closing the last trading session at $100.23.
MRNA’s POWR Ratings reflect its promising outlook. The POWR Ratings are calculated by considering 118 different factors, with each factor weighted to an optimal degree.
MRNA has a B grade for Value. It is ranked #128 in the 361-stock Biotech industry.
Click here to access the additional MRNA ratings (Growth, Momentum, Sentiment, Quality, and Stability).
Stock #2: 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 solidifies FOLD’s position as a leading provider of groundbreaking medical therapies and opens up a broader patient base, potentially translating into enhanced revenue streams and improved financial performance for the company.
FOLD’s trailing 12-month asset turnover ratio of 0.46x is 22.1% higher than the 0.38x industry average. Its trailing 12-month gross profit margin of 88.91% is 59.6% higher than the 55.72% industry average.
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 quarter 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.
Street expects FOLD’s revenue for the fiscal third quarter ending September 2023 to increase 23.4% year-over-year to $100.83 million.
FOLD’s shares have gained 17.3% over the past year to close the last trading session at $12.21.
FOLD’s strong fundamentals are reflected in its POWR Ratings. It has an A grade for Growth. Within the same industry, it is ranked #35.
Beyond what is stated above, we’ve also rated FOLD for Momentum, Stability, Value, Quality, and Sentiment. Get all FOLD ratings here.
Stock #1: Entrada Therapeutics, Inc. (TRDA)
TRDA is a biotechnology company that develops endosomal escape vehicle (EEV) therapeutics for the treatment of multiple neuromuscular diseases.
On September 21, TRDA announced that the first participant had been dosed in its Phase 1 clinical trial evaluating ENTR-601-44 for the potential treatment of individuals with Duchenne muscular dystrophy who are exon 44 skipping amenable.
TRDA’s trailing 12-month levered FCF margin of 156.30% is significantly higher than the 0.26% industry average. Its trailing 12-month gross profit margin of 59.85% is 7.4% higher than the 55.72% industry average.
During the second quarter that ended June 30, 2023, TRDA’s collaboration revenue came in at $18.17 million. The company’s loss from operations declined 30.9% from the year-ago quarter to $16.30 million. In addition, as of June 30, 2023, the company’s cash and cash equivalents stood at $376.79 million, compared to $188.71 million as of December 31, 2022.
Analysts expect TRDA’s revenue for the fiscal third quarter ending September 2023 to be $9.60 million.
Shares of TRDA have gained marginally year-to-date to close the last trading session at $13.61.
It’s no surprise that TRDA has an overall rating of B, which equates to Buy in our proprietary rating system.
TRDA has a B grade for Value. It is ranked #28 in the Biotech industry.
In addition to the POWR Ratings highlighted above, one can access TRDA’s ratings for Stability, Growth, Quality, Momentum, and Sentiment here.
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MRNA shares were trading at $99.86 per share on Friday afternoon, down $0.37 (-0.37%). Year-to-date, MRNA has declined -44.40%, versus a 14.44% rise in the benchmark S&P 500 index during the same period.
About the Author: Nidhi Agarwal
Nidhi is passionate about the capital market and wealth management, which led her to pursue a career as an investment analyst. She holds a bachelor's degree in finance and marketing and is pursuing the CFA program. Her fundamental approach to analyzing stocks helps investors identify the best investment opportunities. More...
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