According to the World Health Organization, the prevalence of chronic diseases are expected to grow 57% by the end of 2020. The aging population, and a change in lifestyle across the world have led to long-term health issues. This is likely to put increased pressure on healthcare systems, and emerging nations would be worst impacted.

Moreover, the pace at which the pandemics such as H1N1, SARS, MERS, and Ebola have spread in the past decade, with the most recent being COVID-19, is startling the entire globe. Such occurrences demand a healthcare infrastructure that is responsive and swift. The approach of healthcare must be patient-centric and backed by disruptive technology. Many biotechnology companies have sensed this opportunity and have begun implementing innovative practices in their operations. These biotech companies aren’t just limited to drug or vaccine development, they are also present in offbeat segments like medical instruments and hospice care.

From an investment perspective, these segments are growth hotspots and could dominate the healthcare market in 2021 and beyond. As per IBIS World, the US Hospices & Palliative Care Centers industry is worth $24.2 billion in 2020. A growing number of the adult population is likely to boost this industry further. Meanwhile, according to experts, the global medical devices market is estimated to grow to $612.7 billion by 2025.

Seagen Inc. (SGEN), Genmab A/S (GMAB), Amedisys Inc (AMED), and Masimo Corporation (MASI) are innovative biotech players that possess immense future prospects. Based on their recent performance and growth potential, it’s worth considering these stocks now.

Seagen Inc. (SGEN)

SGEN is a biotechnology company that primarily deals with developing and marketing an innovative treatment of cancer that leverages monoclonal antibody-based therapies. Some of the drugs formulated by the company include Adcetris, Padcev, and Tukysa.

SGEN began operations from Seattle in 1998, however, it has now transformed into a global biotech company. Earlier this month, it also changed its name to Seagen from Seattle Genetics. This reflects a change in the company’s branding as they commercialize Tukysa, a metastatic breast cancer treatment, globally.

During the second quarter that ended June 2020, SGEN’s total revenue climbed 51.3% to $278 million. The company posted record net product sales of $240.5 million driven largely by Adcetris Padcev and Tukysa. SGEN also reported positive top line results from the pivotal clinical trial of Tisotumab Vedotin. SGEN’s loss for the quarter also narrowed to $0.12 from $0.49 posted in the prior-year period. The company reiterated its guidance for the fiscal year 2020.

The company’s EPS is expected to grow 181.8% to $0.45 for the quarter that ended September 2020, while the revenue is likely to increase 136.4% to $500.7 million. As more clinical trials are approved by the FDA, SGEN will see newer avenues of revenue.

The stock has gained 72.3% year-to-date to close yesterday’s session at $195.83. The stock is up more than 39.8% in the last six months.

How does SGEN stack up for the POWR Ratings?

A for Trade Grade

B for Buy & Hold Grade

A for Peer Grade

B for Overall POWR Rating

The stock is also ranked #19 out of 384 stocks in the Biotech industry.

Genmab A/S (GMAB)

GMAB is an international biotechnology company that develops human antibody therapeutics for treating cancer and other diseases. The company is based out of Denmark and its portfolio includes two products, daratumumab, marketed as DARZALEX, and ofatumumab, marketed as Arzerra. DARZALEX is used for the treatment of certain indications of multiple myeloma, while Arzerra is used to cure certain indications of chronic lymphocytic leukemia.

On October 13^th, GMAB revealed that net sales of DARZALEX® during the third quarter of 2020 was $1.1 billion. Notably, Genmab receives royalties on the global net sales of DARZALEX and DARZALEX FASPRO as a part of the exclusive worldwide license to Janssen Biotech, Inc. to develop, manufacture and commercialize daratumumab.

GMAB’s total revenue for the six months that ended June 2020 surged 365% year-over-year to DKK 3.7 billion. The AbbVie (ABBV) collaboration & DARZALEX royalties drove the robust growth in revenue. Meanwhile, the company also posted a 42% year-over-year growth in its operating expenses, due to an increased focus on its investment in pipeline & capabilities. GMAB raised the upper end of its full-year 2020 revenue guidance to DKK 9.7 billion from DKK 9.5 billion, amid the expectation of recurring revenue growth and focussed investments.

The street expects revenue for the third quarter that ended September to increase 57.1% year-over-year, while the EPS for the current year is likely to surge 112.5%.

GMAB closed yesterday’s trading session at $34.97, gaining 59.7% year-to-date. The stock is up more than 50% over the last six months and is trading 11.1% below its 52-week high of $38.87.

GMAB’s strong fundamentals are reflected in its POWR Ratings. It has a “Buy” rating with an “A” in Peer Grade. Its Buy & Hold Grade and Trade Grade are a “B”. Within the Biotech industry, it’s ranked #20 out of 384 stocks.

Masimo Corporation (MASI)

MASI manufactures non-invasive patient monitoring technologies globally. The company primarily sells pulse oximetry to hospitals. The measure-through-motion and low-perfusion pulse technology is the driving force behind the Masimo Signal Extraction Technology (SET) pulse oximetry.

On October 6, the company announced preliminary financial results for the third quarter that ended September. The company expects its product revenue for the quarter to be between $274 million to $278 million, indicating nearly 19.7% to 21.4% year-over-year growth. MASI’s full-year guidance for 2020 product revenue is expected to lie between $1.1 billion and $1.1 billion.

MASI’s revenue during the second quarter that ended June 2020 increased 31.0% to $301 million, largely driven by growth in its product revenue. The shipments of non-invasive technology boards and instruments, excluding handheld and fingertip pulse oximeters, soared 174% year-over-year to 165,600 units. The company’s EPS for the second quarter rose to $0.96 from $0.79 in the same period last year. Analysts expect MASI’s revenue for the third quarter to increase 12% to $256.6 million. The company’s EPS for the quarter is likely to decline 18.4% to $0.62.

MASI has gained more than 54.9% year-to-date to close yesterday’s trading session at $246.04. Over the past six months, the stock has increased nearly 20%.

It’s no surprise that MASI is rated “Strong Buy” in our POWR Ratings system. It also has an “A” for Trade Grade, Buy & Hold Grade, Peer Grade, and Industry Rank. In the 142-stock Medical – Devices & Equipment industry, it is ranked #11.

Amedisys Inc (AMED)

AMED is one of the leading home health and hospice care providers in the US. It operates in three segments: Home Health Care, Hospice Services, and Personal Care. Each year, the company provides quality and distinctive care to nearly 415,000 patients.

In a move to diversify its offerings amid COVID-19 headwinds, AMED has ventured into palliative care. At present, the company operates 12 sites providing palliative care. It has plans to add two more locations to drive future growth. Earlier this year, the company also acquired AseraCare Hospice to expand its market in hospice and palliative care.

For the second quarter that ended June 2020, AMED’s net service revenue declined 1.6% year-over-year to $485.0 million. However, its EPS rose 1.9% to $1.04. The street expects EPS for the third quarter that ended September 2020 to increase 14.7% per annum to $1.28. Analysts estimate revenue to increase 7.8% to $533.2 million.

The stock has gained more than 50% year-to-date to close yesterday’s trading session at $252.72. It hit its 52-week high of $258.62 two weeks back with expectations of better-than-expected third quarter results. The stock has gained more than 30% over the past six months.

AMED is rated “Strong Buy” in our POWR Rating system, consistent with the strength in its business model. It also has an “A” for Trade Grade, Buy & Hold Grade, and Peer Rank, and a “B” in Industry Rank. In addition, it is ranked #3 out of 70 stocks in the Medical – Services industry.

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SGEN shares were trading at $198.23 per share on Tuesday afternoon, up $2.40 (+1.23%). Year-to-date, SGEN has gained 73.49%, versus a 6.80% rise in the benchmark S&P 500 index during the same period.

About the Author: Namrata Sen Chanda

Namrata is an accomplished financial journalist, with nearly a decade of experience. She specializes in interpreting news releases and framing investment strategies, and has worked with some of the leading companies in real estate, banking, insurance, mutual funds, financial research, fintech, and investment education. More...

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