Since the onset of the COVID-19 pandemic, the healthcare sector has been in the spotlight. Presently, when the worst of the COVID-19 is behind us, healthcare has still restored some long-term attributes such as new cost-saving and care-improving advances in medical technologies. Additionally, the sector shows attractive valuation, balance sheets, and stock buybacks.
This year, the healthcare sector has seen an IPO boom. Since healthcare spending is expected to increase significantly this year, many newly listed stocks are expected to witness solid growth.
Healthcare IPOs, 2seventy bio, Inc. (TSVT), Regencell Bioscience Holdings Limited (RGC), and Biofrontera Inc. (BFRI) have generated significant returns since their stock market debut and could be ideal additions to one’s watchlist.
2seventy bio, Inc. (TSVT)
TSVT operates as a cell and gene therapy company that researches, develops, and commercializes cancer treatments in the United States. The company started trading independently on November 5, 2021, separated from bluebird bio, Inc. (BLUE), as a publicly-traded company on the Nasdaq Global Select Market.
On December 1, TSVT announced that the United States Food and Drug Administration (FDA) had accepted the Investigational New Drug (IND) that was developed in collaboration with Seattle Children’s Therapeutics for the potential treatment of acute myeloid leukemia (AML). If commercialized, this new drug could add to the company’s revenues.
For the fiscal third quarter ended September 30, TSVT’s total revenues increased 4.5% year-over-year to $19.26 million. For the nine months ended September 30, net cash provided by financing activities rose 475.5% from the same period last year to $168.20 million.
The consensus EPS estimate for the next year (fiscal 2022) indicates a 5.5% year-over-year increase. Likewise, the consensus revenue estimate of $104.36 million for the upcoming year reflects an improvement of 94% from the current year.
The stock has gained 8.3% over the past month to close Thursday’s trading session at $31.01. It has gained 2.9% intra-day.
Regencell Bioscience Holdings Limited (RGC)
RGC is a Traditional Chinese Medicine (TCM) biosciences company headquartered in Causeway Bay, Hong Kong. The company researches, develops, and commercializes TCM to treat degeneration and neuro-cognitive disorders.
RGC went public on the Nasdaq Capital Market on July 16, 2021, in a traditional IPO process. The company received $21.9 million gross proceeds from the offering, which is expected to be used to fund the second research study, the company’s TCM formulae and products, and general corporate purposes. On July 20, RGC announced the closing of its public offering at $9.50 per share.
On November 22, RGC announced that Yat-Gai Au, the Company’s Chairman & CEO, purchased shares of the company totaling $1,125,807. About this purchase, Mr. Au said, “These share purchases using my personal funds, reflects my confidence in Regencell’s business strategy of becoming a market leader for the treatment of ADHD and ASD disorders, as well as infectious diseases such as COVID-19 (“COVID”).”
In September, RGC announced that its wholly-owned subsidiary in Hong Kong, Regencell Bioscience Limited, has entered into a joint venture with consultancy and manufacturing company Honor Epic Enterprises Limited for offering COVID-19 related treatments to patients in several countries. The joint venture might prove to be profitable for RGC.
RGC’s shares have gained 150.6% since it started trading on July 16 and 50.5% over the past three months to close Thursday’s trading session at $26.31.
Biofrontera Inc. (BFRI)
BFRI operates as a biopharmaceutical company that develops and provides dermatological products to treat skin diseases. The company primarily engages in developing therapies to treat non-melanoma skin cancer. Its shares and warrants started trading on October 29, 2021, after a traditional IPO process.
On December 8, BFRI announced that the United States Patent and Trademark Office (USPTO) issued a Notice of Allowance that protects several innovations related to the company’s offering of the RhodoLED XL lamp. This is expected to enhance the product’s competitive position and bolster the company’s intellectual property portfolio. Earlier, on December 2, USPTO issued a Notice of Allowance that covers BFRI’s innovative, pain-reducing illumination protocol for photodynamic therapy (PDT).
On December 1, the company declared the closing of a private placement with a single institutional investor to purchase up to an aggregate of 2,857,143 shares of common stock. The gross proceeds from the offering came in at $15 million, which should improve BFRI’s cash position.
For the fiscal third quarter ended September 30, BFRI’s net revenues increased 33.3% year-over-year to $4.33 million. This can be attributed to an improvement of 33.5% from the prior-year quarter in net product revenues to $4.32 million.
Analysts expect BFRI’s EPS to increase 66.4% year-over-year in the next year (fiscal 2022). Likewise, Street expects revenue to rise 61.4% from the current year to $41.44 million in the upcoming year.
The stock has gained 198.6% since it went public on October 29 to close Thursday’s trading session at $13.17. It has gained 71.8% over the past five days.
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TSVT shares were unchanged in after-hours trading Monday. Year-to-date, TSVT has gained 125.27%, versus a 29.35% rise in the benchmark S&P 500 index during the same period.
About the Author: Anushka Dutta
Anushka is an analyst whose interest in understanding the impact of broader economic changes on financial markets motivated her to pursue a career in investment research. More...
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