With more than 50% of the U.S. population now fully vaccinated for COVID-19 (according to the CDC), biotech companies have shifted their focus to research and development projects for other critical ailments. As a result, the global biotechnology market is expected to grow at a 15.8% CAGR over the next seven years to hit a $2.44 trillion market size by 2028.
Promising clinical trials have fostered increased investor optimism about the industry, as evidenced by the Invesco Dynamic Biotech & Genome ETF’s (PBE) 25.7% returns compared S&P SPDR 500 Trust Fund ETF’s (SPY) 20.4% gains over the past nine months.
Thus, Wall Street analysts believe Organogenesis Holdings Inc. (ORGO), BioDelivery Sciences International, Inc. (BDSI) and Champions Oncology, Inc. (CSBR) have the potential to rally by more than 45% over the next 12 months.
Organogenesis Holdings Inc. (ORGO)
ORGO is a regenerative medicine company that develops, manufactures, and commercializes solutions for the advanced wound care, surgical, and sports medicine markets in the United States. It serves hospitals, wound care centers, government facilities, ambulatory service centers, and physicians’ offices through a direct sales force and independent agencies.
On January 14, ORGO enrolled its first patient in its pivotal Phase 3 clinical trial to evaluate the safety and efficacy of ReNu, a cryopreserved amniotic suspension allograft (ASA) for the management of symptoms associated with knee osteoarthritis (OA). The company is looking forward to leveraging its Regenerative Medicine Advanced Therapy (RMAT) designation to work closely with the Food and Drug Association (FDA) to expedite ReNu’s review.
For its fiscal 2021 first quarter, ended March 31, 2021, ORGO’s total revenue increased 66.1% year-over-year to $102.55 million. Its gross profit increased 79.5% year-over-year to $77.06 million. Its income from operations is reported to be $12.62 million, compared to a $15.08 million loss in the first quarter of 2020. Its net income came in at $9.94 million, versus a $16.31 million net loss in the year-ago period. ORGO’s EPS has been $0.07, compared to a $0.16 loss per share in the prior-year period. As of March 31, 2021, ORGO had $77.96 million in cash.
A $0.07 consensus EPS estimate for the current quarter, ending June 30, 2021, represents a 240% year-over-year improvement. The stock surpassed consensus EPS estimates in each of the trailing four quarters. The $107.30 million consensus revenue estimate for the current quarter represents a 55.6% rise from the prior-year period. Analysts expect ORGO’s EPS to grow 44.5% per annum over the next five years. ORGO has climbed 397.9% over the past year and 224.8% over the past six months to close yesterday’s trading session at $17.91.
All four Wall Street analysts who rated the stock have rated it a ‘Buy.’ They expect the stock to hit $26.33 in the near term, which indicates a potential upside of 47%.
It is no surprise that ORGO has an overall B rating, which equates to Buy in our POWR Ratings system. The POWR Ratings are calculated by considering 118 different factors, with each factor weighted to an optimal degree.
The stock has an A grade for Sentiment, and a B grade for Growth and Value. To see additional POWR Ratings for ORGO’s Quality, Momentum and Stability, click here.
ORGO is ranked #13 of 493 stocks in the Biotech industry.
BioDelivery Sciences International, Inc. (BDSI)
BDSI is a specialty pharmaceutical company that develops and commercializes pharmaceutical products for chronic conditions, aimed principally at the areas of pain management and addiction.
At a North American Neuromodulation Society Meeting (NANS) held virtually on January 15 to 16, 2021, BDSI presented data from three placebo-controlled studies that compared the safety outcomes of BELBUCA versus ORAL oxycodone. These successful studies are likely to expand BDSI’s market reach.
BDSI’s total revenue came in at $41.02 million for its fiscal 2021 first quarter, ended March 31, 2021, which represents a 7.2% improvement year-over-year. The company’s income from operations was $7.44 million, up 24.3% from the prior-year period. Its non-GAAP net income has increased 2.4% year-over-year to $8.46 million. Its EPS was reported at $0.05. As of March 31, 2021, CERS had cash and cash equivalents of 116.44 million.
Analysts expect BDSI’s EPS to improve 400% year-over-year for the current quarter, ending June 30, 2021 to $2.14. And its $42.41 million consensus revenue estimate for the current quarter represents a 15.9% rise on a year-over-year basis. Analysts expect the stock’s EPS to grow at 25% per annum over the next five years. BDSI closed yesterday’s trading session at $3.51.
Based on three Wall Street analysts that have rated BDSI a ‘Buy’, the stock is expected to hit $6.25 in the near term, which indicates a potential 78.1% upside.
BDSI’s POWR Ratings reflect this promising outlook. The stock has an overall B rating, which equates to Buy in our POWR Ratings system.
The stock has an A grade for Value and Quality. In addition to the POWR Ratings grades we’ve just highlighted, one can see BDSI’s ratings for Growth, Stability, Sentiment and Momentum here. BDSI is ranked #18 in the Biotech industry.
Champions Oncology, Inc. (CSBR)
CSBR develops and sells technology solutions and products to personalize the development and use of oncology drugs. It markets its products through the internet, word of mouth, and a sales force to patients and physicians.
CSBR partnered with Code Ocean on January 19 to expand the functionality of Code Ocean’s SaaS program, Lumin Bioinformatics, that will enable clients to centralize, store, and organize large amounts of their own code and data within Lumin. These new applications transform Lumin into an enterprise-level solution, supporting CSBR’s efforts to broaden the market.
CSBR’s total revenue from its oncology services segment increased 20% year-over-year to $10.81 million. The company’s income from operations is reported to be $763 million for the quarter, which represents a 76.2% improvement year-over-year. While its net income increased 81.8% year-over-year to $740 million, its EPS increased 66.7% year-over-year to $0.05.
For the current quarter, ending July 31, 2021, analysts expect CSBR’s revenue to be $10.43 million, which represents a 19.7% rise from the prior-year period. The stock has gained 16.6% over the past nine months to close yesterday’s trading session at $9.86.
Wall Street analysts expect the stock to hit $15.50 in the near term, which indicates a potential 57.2% upside.
CSBR’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall B rating, which equates to Buy in our proprietary rating system.
The stock has a B grade for Growth and Sentiment. We have also graded CSBR for Quality, Value, Stability and Momentum. Click here to access all CSBR ratings. CSBR is ranked #16 in the Biotech industry.
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ORGO shares were trading at $17.92 per share on Friday afternoon, up $0.01 (+0.06%). Year-to-date, ORGO has gained 137.98%, versus a 12.94% 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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