The biotech sector is revolutionizing healthcare with tailored treatments driven by affordable genetic profiling, enhancing efficacy while reducing side effects. This innovation fuels robust demand and strong growth potential for leaders in the field.

Therefore, as niche biotech pioneers redefine innovation, investors may consider top stocks like Halozyme Therapeutics, Inc. (HALO), BioMarin Pharmaceutical Inc. (BMRN),  and United Therapeutics Corporation (UTHR), for solid gains.

This niche sector thrives as biologics address complex diseases, with rising biosimilar approvals enhancing accessibility and expanding market opportunities. Meanwhile, emerging markets are driving growth through increased biotech investments, intensifying competition. The global biotechnology market is projected to reach $546 billion by 2025, reflecting a CAGR of 13%, despite economic uncertainties.

Notably, recent innovations in CRISPR technology enable precise DNA modifications, opening new avenues in medicine and agriculture. Biotech companies pioneering these technologies hold transformative potential. Additionally, the rare disease segment stands out for its high profitability, supported by exclusivity and incentives, making it an attractive niche for strategic investments.

Considering these conducive trends, let’s analyze the fundamental aspects of the three Biotech picks, beginning with the third choice.

Stock #3: Halozyme Therapeutics, Inc. (HALO)

HALO is a biopharma technology platform company that researches, develops, and commercializes proprietary enzymes and devices internationally. The company’s products are based on the patented recombinant human hyaluronidase enzyme (rHuPH20), which enables the delivery of injectable biologics, such as monoclonal antibodies and other therapeutic molecules, as well as small molecules and fluids.

On December 30, 2024, HALO announced that Takeda received Japanese regulatory approval for HYQVIA, the first subcutaneous immunoglobulin therapy with reduced dosing frequency for patients with primary or secondary immunodeficiency. This therapy utilizes HALO’s ENHANZE technology to improve absorption and administration flexibility.

On the same date, HALO announced FDA approval of Opdivo Qvantig, the first subcutaneously administered PD-1 inhibitor, co-formulated with its ENHANZE technology. This new formulation offers faster administration and comparable efficacy and safety to IV Opdivo, enhancing treatment flexibility for patients with solid tumors.

In terms of the trailing-12-month asset turnover ratio, HALO’s 0.47x is 13.7% higher than the 0.42x industry average. Similarly, its 58.37% trailing-12-month EBITDA margin is 888.7% higher than the 5.90% industry average. Its 50.35% trailing-12-month EBIT margin is substantially higher than the 2.69% industry average.

HALO’s total revenues for the third quarter ended September 30, 2024, rose 34.3% year-over-year to $290.08 million. Its operating income came in at $163.20 million, up 84.9% over the year-ago quarter.

For the same quarter, the company’s net income and EPS grew 67.4% and 72.1% from the year-ago values to $137.01 million, or $1.05 per share, respectively. In addition, its adjusted EBITDA rose 59.8% year-over-year to $183.56 million.

Analysts expect HALO’s revenue for the quarter ended December 31, 2024, to increase 24.2% year-over-year to $285.74 million. Its EPS for the same quarter is expected to grow 41.3% year-over-year to $1.16. The company surpassed the Street EPS estimates in three of the trailing four quarters. Over the past year, the stock has gained 56.4%, closing the last trading session at $53.83.

HALO’s POWR Ratings reflect its positive prospects. It has an overall B rating, equating to a Buy in our proprietary rating system. The POWR Ratings are calculated by considering 118 distinct factors, with each factor weighted to an optimal degree.

HALO has a B grade for Growth, Value, and Quality. Within the Biotech industry, it is ranked #30 out of 334 stocks. Click here for the additional POWR Ratings of HALO (Momentum, Stability, and Sentiment).

Stock #2: BioMarin Pharmaceutical Inc. (BMRN)

BMRN develops and commercializes therapies for people with serious and life-threatening rare diseases and medical conditions. Its commercial products include Vimizim, Naglazyme, and Kuvan.

In terms of the trailing-12-month levered FCF margin, BMRN’s 5.26% is 140.1% higher than the 2.19% industry average. Its 15.48% trailing-12-month EBITDA margin is 162.2% higher than the 5.90% industry average. Also, its 3.44% trailing-12-month Capex / Sales is 10.7% higher than the 3.11% industry average.

For the fiscal third quarter, which ended on September 30, 2024, BMRN’s total revenues increased by 28.3% year-over-year to $745.74 million. Its non-GAAP income and non-GAAP EPS rose 100% and 97.8% over the prior-year quarter, reaching $178 million and $0.91, respectively. Moreover, BMRN’s non-GAAP income from operations was $207 million, up 120.2% year-over-year.

For the quarter ended December 31, 2024, BMRN’s EPS and revenue are expected to increase 45.1% and 10.1% year-over-year to $0.71 and $711.32 million, respectively. BMRN surpassed the consensus EPS estimates in each of the trailing four quarters. Over the past month, the stock has declined 3.3% to close the last trading session at $63.81.

It’s no surprise that BMRN has an overall rating of B, which translates to a Buy in our proprietary rating system.

It is ranked #10 in the same industry. It has an A grade for Growth and a B for Value and Sentiment. Click here to see BMRN’s Momentum, Stability, and Quality ratings.

Stock #1: United Therapeutics Corporation (UTHR)

UTHR is a biotechnology company that engages in the development and commercialization of products to address the unmet medical needs of patients with chronic and life-threatening diseases internationally.

On December 17, 2024, UTHR announced the world’s first successful transplant of a UKidney, a genetically engineered pig kidney, into a living human. This milestone builds on prior xenotransplants and advances the company’s mission to address organ shortages through innovative solutions like xenotransplantation and other organ alternatives.

In terms of the trailing-12-month gross profit margin, UTHR’s 88.94% is 52.4% higher than the 58.37% industry average. Likewise, its 51.23% trailing-12-month EBITDA margin is 767.8% higher than the 5.90% industry average. Its 48.82% trailing-12-month EBIT margin is substantially higher than the 2.69% industry average.

UTHR’s total revenues for the third quarter, which ended September 30, 2024, increased 22.9% year-over-year to $748.90 million. Its operating income rose 4.9% from the year-ago value to $343.10 million. For the same quarter, the company’s net income came in at $309.10 million, or $6.39 per common share, representing an increase of 15.5% and 18.8% over the prior-year quarter, respectively.

Street expects UTHR’s EPS and revenue for the quarter ended December 31, 2024, is expected to increase 46.4% and 20.4% year-over-year to $6.38 and $739.92 million, respectively. UTHR’s stock has gained 66.5% over the past year to close the last trading session at $364.70.

UTHR’s positive outlook is reflected in its POWR Ratings. It has an overall rating of A, equating to a Strong Buy in our proprietary rating system.

It has an A grade for Value and a B for Quality. Within the Biotech industry, it is ranked #8. Beyond what we stated above, we also have given UTHR grades for Growth, Momentum, Stability, and Sentiment. Get all the UTHR ratings here.

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UTHR shares were trading at $364.87 per share on Wednesday morning, up $0.17 (+0.05%). Year-to-date, UTHR has gained 3.41%, versus a 0.70% rise in the benchmark S&P 500 index during the same period.

About the Author: Abhishek Bhuyan

Abhishek embarked on his professional journey as a financial journalist due to his keen interest in discerning the fundamental factors that influence the future performance of financial instruments. More...

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