After being thrust into the limelight during the pandemic, biotech stocks fell out of investors’ radars as people got vaccinated and resumed their regular activities. However, with a rapidly aging population and the rise of sedentary lifestyles, diseases are on the rise, driving the demand for medicines.
The global biotechnology market is estimated to grow at a CAGR of 15.5% to reach $1.35 trillion by 2030. Investors’ interest in biotech stocks is evident from the iShares Biotechnology ETF’s (IBB) 9.1% returns over the past three months.
Moreover, a new strain of Omicron could lead to a surge in COVID-19 cases in the U.S., driving the demand for biotech solutions. Amid this backdrop, it could be wise to buy fundamentally strong biotech stocks Amgen Inc. (AMGN) and Gilead Sciences, Inc. (GILD).
Amgen Inc. (AMGN)
AMGN discovers, develops, manufactures, and delivers human therapeutics worldwide. It focuses on inflammation, oncology/hematology, bone health, cardiovascular disease, nephrology, and neuroscience areas.
On October 20, 2022, AMGN announced that it had completed its acquisition of biopharmaceutical company ChemoCentryx, Inc. (CCXI). Chairman and CEO at AMGN, Robert A. Bradway, believes that ChemoCentryx would enhance AMGN's leading inflammation and nephrology portfolio and includes TAVNEOS®, a first-in-class treatment for an autoimmune disease for which there remains a significant unmet medical need.
For the fiscal third quarter, AMGN’s non-GAAP operating income increased 7.4% year-over-year to $3.28 billion. The company’s non-GAAP net income increased 8.9% from the prior-year period to $2.53 billion. Also, its non-GAAP EPS came in at $4.70, representing an increase of 15.2% year-over-year.
AMGN’s EPS and revenue for the quarter ending March 31, 2023, are expected to increase 6.3% and 3.8% year-over-year to $4.52 and $6.47 billion, respectively. It has a commendable earnings surprise history, surpassing the consensus EPS estimates in each of the trailing four quarters. The stock has fallen 13.5% over the past three months to close the last trading session at $261.65.
AMGN’s POWR Ratings reflect solid prospects. The stock has an overall rating of B, equating to a Buy in our proprietary rating system. The POWR ratings assess stocks by 118 different factors, each with its own weighting.
Within the Biotech industry, it is ranked #12 out of 382 stocks. The company has an A grade for Quality and a B for Stability.
Click here to see the additional ratings of AMGN for Growth, Value, Momentum, and Sentiment.
Gilead Sciences, Inc. (GILD)
GILD, a biopharmaceutical company discovers, develops, and commercializes medicines for unmet medical needs worldwide. The company provides products for treating many diseases, including HIV/AIDS, coronavirus disease 2019, and liver diseases.
On January 3, 2023, GILD and EVOQ Therapeutics, Inc. announced a collaboration and licensing agreement to advance EVOQ’s proprietary technology for treating rheumatoid arthritis (RA) and lupus. Under the agreement, Gilead and EVOQ will collaborate on preclinical development to address the needs of people with autoimmune diseases.
GILD’s total current liabilities for the fiscal third quarter ended September 30, 2022, have declined 10.2% to $10.42 billion, compared to $11.61 billion for the fiscal year ended December 31, 2021. Additionally, its non-GAAP EPS came in at $1.90. Its trodelvy’s sales came in at $180 million, representing an increase of 78.2% year-over-year.
GILD's EPS for the quarter ended December 31, 2022, is expected to increase 116.3% year-over-year to $1.49. Its revenue for the quarter ending June 30, 2023, is expected to increase 0.7% year-over-year to $6.31 billion.
It has an impressive earnings surprise history, surpassing the consensus EPS estimates in three of the trailing four quarters. The stock has gained 43.1% over the past nine months to close the last trading session at $85.39.
GILD’s strong outlook is reflected in its POWR Ratings. The stock has an overall rating of A, which equates to a Strong Buy. It is ranked #3 in the same industry. In addition, it has an A grade for Sentiment and a B for Value and Quality.
To see the other ratings of GILD for Growth, Momentum, and Stability, click here.
AMGN shares were trading at $262.77 per share on Wednesday morning, up $1.12 (+0.43%). Year-to-date, AMGN has gained 0.05%, versus a 0.09% rise in the benchmark S&P 500 index during the same period.
About the Author: Malaika Alphonsus
Malaika's passion for writing and interest in financial markets led her to pursue a career in investment research. With a degree in Economics and Psychology, she intends to assist investors in making informed investment decisions.
2 Biotech Stocks to Buy Amid a Blazing Hot Run StockNews.com
