The COVID-19 pandemic fostered advancements in drug development and the introduction of vaccines. In 2021, this industry generated huge revenues as countries rushed to vaccinate their population to contain the virus. Moreover, the global biotechnology market is expected to grow at a 13.9% CAGR from 2022 to 2030.
Active development of therapeutics and other medications to meet the growing incidences of chronic diseases, rising investments in innovative technologies, and growing demand for biotechnology tools for agricultural applications are creating significant growth opportunities for this sector. Biotech had 50 new molecular entities (NMEs) approved by the U.S. FDA in 2020 and 2021, up from an annual total of 29 a decade ago.
Furthermore, given the sector’s reputation as a safe haven amid market downturns, biotech stocks Amgen Inc. (AMGN) and AstraZeneca PLC (AZN) could be ideal buy-and-hold options for the long term, considering their fundamental strength.
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 August 29, AMGN presented new compelling data from the Phase 3 FOURIER open-label extension (OLE) studies of Repatha® in adults with atherosclerotic cardiovascular disease (ASCVD).
“The new findings from the FOURIER-OLE studies confirm that earlier initiation of Repatha, combined with longer duration of treatment, has the potential to deliver a greater reduction in cardiovascular risk, including death,” said David M. Reese, M.D., executive V.P. of Research and Development at Amgen. This should prove to be strategically beneficial for the company.
For the fiscal second quarter of 2022, AMGN’s total revenues increased 1% year-over-year to $6.59 billion. Its non-GAAP operating income grew 107.7% from the year-ago value to $3.34 billion. Non-GAAP net income for the quarter stood at $2.50 billion, reflecting a 145.3% increase year-over-year. Moreover, its non-GAAP EPS was $4.65, up 162.7% from the prior-year quarter.
Street expects AMGN’s revenue for the fiscal year ending December 2022 to come in at $26.16 billion, indicating a marginal year-over-year increase. Its EPS is expected to improve 2.1% year-over-year to $17.45. The company also beat the consensus EPS estimates in each of the trailing four quarters.
AMGN’s shares have gained 17.7% over the past nine months to close the last trading session at $239.38.
AMGN’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall rating of B, translating to Buy in our POWR Ratings system. The POWR Ratings are calculated by considering 118 different factors, with each factor weighted to an optimal degree.
The company has an A grade in Quality and a B in Value. It is ranked #9 out of the 398 stocks in the Biotech industry.
To get AMGN’s ratings for Momentum, Stability, Growth, and Sentiment, click here.
AstraZeneca PLC (AZN)
Headquartered in Cambridge, the United Kingdom, AZN focuses on discovering, developing, manufacturing, and commercializing prescription medicines.
On August 27, AZN’s results from the DELIVER Phase III trial showed that FARXIGA® (dapagliflozin) significantly reduced the composite of cardiovascular (CV) death or worsening heart failure (HF) in patients with HF and mildly reduced ejection fraction (EF). This should benefit the company if commercialized.
AZN’s total revenue increased 31% year-over-year to $10.77 billion in the fiscal second quarter of 2022. Its gross profit improved 29% year-over-year to $7.77 billion over the period, while its EBITDA increased 1% from its year-ago value to $1.90 billion.
AZN’s EPS for the fiscal quarter ending September 2022 is expected to improve 35.9% year-over-year to $0.73. Its consensus revenue estimate of $10.85 billion represents a 10% increase year-over-year.
AZN’s shares have gained 18.6% over the past nine months to close the last trading session at $64.92.
The company has an overall rating of B, translating to Buy in our proprietary rating system. AZN is also rated B in Growth and Sentiment. Within the Medical - Pharmaceuticals industry, it is ranked #26 0f 167 stocks.
Click here for additional POWR Ratings for AZN for Value, Stability, Quality, and Momentum.
AMGN shares were trading at $238.79 per share on Tuesday afternoon, down $0.59 (-0.25%). Year-to-date, AMGN has gained 8.75%, versus a -15.76% 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.
2 Biotech Stocks to Buy and Hold for the Long Term StockNews.com
