The biotech industry thrived during the pandemic by introducing vaccines and antivirals, registering substantial revenue growth. Moreover, the active development of therapeutics and other medications to treat increasing chronic diseases and investment in innovative technologies are creating lucrative growth opportunities for this sector.
The biotechnology market is expected to surpass around $1.68 trillion by 2030, expanding at a CAGR of 8.7% from 2021 to 2030.
As of early June, Biotech accounted for 65% of approximately 6,000 clinical asset candidates in active development, including more than 2,000 cell and gene therapies that are projected to play a crucial role in driving revenues over the next decade.
Moreover, given the sector’s reputation as a safe haven amid market downturns, fundamentally solid biotech stocks Vertex Pharmaceuticals Incorporated (VRTX), Amgen Inc. (AMGN), Biogen Inc. (BIIB), BioNTech SE (BNTX), United Therapeutics Corporation (UTHR) could be ideal buy and hold options.
Vertex Pharmaceuticals Incorporated (VRTX)
VRTX, a biotechnology company, develops and commercializes therapies for treating cystic fibrosis.
On July 22, VRTX announced its plans to advance NaV1.8 inhibitor VX-548 into Phase 3 clinical trials and initiate its Phase 2 dose-ranging study in neuropathic pain by the end of this year.
The company expects this to be the pivotal development program for acute pain and introduce a medicine that delivers effective pain control without addictive potential.
In the same month, VRTX announced an exclusive, four-year global research collaboration with Verve Therapeutics, Inc. (VERV) to discover and develop an in vivo gene editing program for liver disease. This is expected to combine the companies’ expertise in gene editing and drug development and serve more patients.
VRTX’s total revenues increased 21.6% year-over-year to $2.10 billion in the fiscal quarter ended March 31, 2022. Its income from operations grew 17.2% from the year-ago value to $1.04 billion, while its net income came in at $762.10 million, up 16.7% year-over-year. The company’s net income per share grew 18.9% from the prior-year quarter to $2.96 in the same period.
Analysts expect VRTX’s revenue for the fiscal quarter ended June 2022 to come in at $2.13 billion, indicating an increase of 18.9% year-over-year. Also, the company’s EPS is expected to grow 13% year-over-year to $3.51 in the same period. VRTX beat the consensus EPS estimates in three of the trailing four quarters.
VRTX gained 41.5% over the past year to close the last trading session at $283.68. It gained 53.4% over the past nine months.
VRTX’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall rating of A, translating to Strong Buy in our proprietary rating system. The POWR Ratings are calculated by considering 118 different factors, with each factor weighted to an optimal degree.
VRTX also has an A grade in Quality and a B in Value and Growth. It is ranked #1 of 402 stocks in the Biotech industry.
Beyond what is stated above, we’ve also rated VRTX for Momentum, Sentiment, and Stability. Get all the VRTX ratings here.
Amgen Inc. (AMGN)
AMGN discovers, manufactures, and delivers human therapeutics worldwide. It focuses on inflammation, oncology/hematology, bone health, cardiovascular disease, nephrology, and neuroscience.
On June 6, AMGN announced that the U.S. FDA had approved RIABNI™, a biosimilar to Rituxan®, for adults with moderate to severely active rheumatoid arthritis. This should expand the company’s portfolio of innovative and biosimilar medicines for inflammatory diseases.
For the fiscal first quarter of 2022, AMGN’s total revenues increased 5.7% year-over-year to $6.24 billion. Its non-GAAP operating income grew 9.6% from the year-ago value to $3.14 billion. Non-GAAP net income for the quarter stood at $2.34 billion, reflecting a 9% increase year-over-year. Moreover, its non-GAAP EPS was $4.25, up 14.9% from the prior-year quarter.
Street expects AMGN’s revenue for the fiscal year ending December 2022 to come in at $26.22 billion, indicating a marginal year-over-year increase. Its EPS is expected to improve 1.7% year-over-year to $17.40. The company also beat the consensus EPS estimates in each of the trailing four quarters.
AMGN’s shares have gained 19.8% over the past nine months to close the last trading session at $248.72.
AMGN’s sound fundamentals are reflected in its POWR Ratings. The stock has an overall rating of A, equating to Strong Buy in our POWR Ratings system.
The company also has an A grade in Quality and a B in Stability and Growth. The stock is ranked #5 in the same industry. Click here to get AMGN’s Momentum, Value, and Sentiment ratings.
Biogen Inc. (BIIB)
BIIB discovers, develops, manufactures, and delivers therapies for treating neurological and neurodegenerative diseases.
On June 22, BIIB and Happify Health, the Intelligent Healing Company, announced a collaboration to provide an artificial intelligence-empowered digital solution for patient education and engagement, to support people living with multiple sclerosis. This collaboration should prove to be strategically beneficial for the company.
Net income attributable to BIIB increased 135.9% year-over-year to $1.06 billion in the fiscal quarter ended June 30, 2022. Its net income per share grew 142.1% from the year-ago value to $7.24.
BIIB’s EPS for the fiscal quarter ending December 2022 is expected to improve 1.3% year-over-year to $3.43. The company surpassed the consensus EPS estimates in three of the trailing four quarters.
BIIB’s shares have gained marginally intraday to close the last trading session at $207.57.
The company has an overall rating of A, translating to Strong Buy in our proprietary rating system. BIIB is also rated A in Value and Quality and a B in Sentiment. Within the Biotech industry, it is ranked #4.
Click here for additional POWR Ratings for Growth, Stability, and Momentum for BIIB.
BioNTech SE (BNTX)
BNTX is a Germany-based clinical-stage biotechnology company that develops and commercializes patient-specific immunotherapies to treat cancer and other serious diseases.
On June 29, Pfizer Inc. (PFE) and BNTX announced an agreement to supply 105 million vaccine doses to the U.S. government to support the continued fight against COVID-19. This should garner significant returns for the company.
BNTX’s total revenue increased 211.2% from the prior-year quarter to €6.37 billion ($6.51 billion) in the fiscal first quarter of 2022. Net profit for the quarter came in at €3.70 billion ($3.78 billion), reflecting an increase of 227.9% year-over-year, while its EPS stood at €14.24, up 224.4% year-over-year.
Its net cash flows from operating activities increased 1,401.1% year-over-year to €4.05 billion ($4.14) in the same period.
BNTX beat the consensus EPS estimates in all the trailing four quarters.
BNTX’s shares have gained 21.1% over the past month to close the last trading session at $162.37.
BNTX’s POWR Ratings reflect this promising outlook. The stock has an overall rating of B, equating to Buy in our POWR Ratings system.
The company has an A grade in Value and a B in Quality and Sentiment. The stock is ranked #30 in the same industry. To get BNTX’s ratings for Growth, Momentum, and Stability, click here.
United Therapeutics Corporation (UTHR)
UTHR, a biotechnology company, engages in developing and commercializing products to address the unmet medical needs of patients with chronic and life-threatening diseases in the United States and internationally.
On June 6, 2022, UTHR announced that in partnership with 3D Systems Corporation (DDD), it had produced the world’s most complex 3D-printed object – a human lung scaffold which consisted of a record 44 trillion voxels that layout 4,000 kilometers of pulmonary capillaries and 200 million alveoli. This is expected to help the company meet its goal of creating an unlimited supply of transplantable lungs in the future.
UTHR’s revenues increased 21.8% year-over-year to $461.90 million in the fiscal first quarter ended March 31, 2022. Its operating income improved 544.4% year-over-year to $288 million over the period, while its net income and net income per share increased 747.7% and 724.6% from its year-ago values to $239.90 million and $5.03, respectively.
Analysts expect UTHR’s EPS for the fiscal quarter ended June 2022 to come in at $4.54, indicating an 11.1% increase year-over-year. The consensus revenue estimate of $461.06 billion represents a year-over-year increase of 3.3% for the same period. UTHR also beat the consensus EPS estimates in three of the trailing four quarters, which is impressive.
The stock has gained 23.5% over the past year and 22.4% over the past three months to close the last trading session at $227.98.
It is no surprise that UTHR has an overall rating of A, equating to Strong Buy in our POWR Ratings system. The stock has a B grade in Value, Growth, Sentiment, and Quality. It is ranked #2 in the same industry.
In addition to the POWR Ratings grades I’ve just highlighted, you can see UTHR’s Momentum and Stability ratings here.
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VRTX shares were trading at $286.80 per share on Tuesday morning, up $3.12 (+1.10%). Year-to-date, VRTX has gained 30.60%, versus a -16.99% rise in the benchmark S&P 500 index during the same period.
About the Author: Komal Bhattar
Komal's passion for the stock market and financial analysis led her to pursue investment research as a career. Her fundamental approach to analyzing stocks helps investors identify the best investment opportunities. More...
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