Advancements, breakthroughs, and investments in the biotechnology industry have set the stage for substantial growth. Given the industry’s growth prospects, it could be wise to invest in sound biotech stocks MannKind Corporation (MNKD), POINT Biopharma Global Inc. (PNT), and LAVA Therapeutics N.V. (LVTX) that are poised to unlock profitable returns. Let us discuss this in detail.
The biotech industry has progressed remarkably due to technological breakthroughs and increased research and development activities. The COVID-19 pandemic further highlighted the industry's significance as companies raced against the clock to meet the urgent need for innovative testing, vaccines, and treatments.
The burgeoning prominence of personalized medicine, collaborations within the biotech industry, the surge in research endeavors, greater integration of genetic treatments, and an escalating number of orphan drug formulations are propelling the exploration of new frontiers in biotechnology applications and fueling the industry’s expansion.
Robust government support through initiatives dedicated to the development of genetic engineering technologies, harnessing the potential of biological data, advancing scalable production methods, and reducing commercialization barriers is further propelling the industry’s growth.
According to Data Bridge Market Research, the biotechnology market is expected to grow at a 29% CAGR reaching $10.13 trillion by 2030. Biotech stocks have garnered significant investor interest, which is evident from the Virtus LifeSci Biotech Products ETF’s (BBP) 12% gain in the past six months and a remarkable 46.3% surge over the past year.
Against the backdrop of industrial tailwinds, fundamentally sound biotech stocks MNKD, PNT, and LVTX that show promising growth potential could make wise additions to your portfolio.
Let us delve into the factors that make them worthwhile investments.
MannKind Corporation (MNKD)
MNKD is a biopharmaceutical company that develops and commercializes therapeutic products for endocrine and orphan lung diseases. It offers Afrezza, an inhaled insulin that improves glycemic control in adults with diabetes, and the V-Go wearable insulin delivery device, which offers continuous subcutaneous insulin infusion for adults.
On January 23, MNKD announced the progression of MNKD 101, a clofazimine inhalation suspension, to an adaptive Phase 2/3 study. The escalating prevalence of pulmonary NTM infection underscores its significance as a major health issue. NTM lung disease affects an estimated 86,000-180,000 individuals in the United States and continues to grow.
The advancement of MNKD 101 to the adaptive Phase 2/3 study increases the likelihood of successful clinical outcomes and potential regulatory approval. This may also enhance the company's financial position through increased investor confidence, partnerships, and ultimately revenue from sales of the therapy.
During the fiscal first quarter that ended March 31, 2023, MNKD’s net revenues from commercial product sales increased 78.7% year-over-year to $17.56 million. Its total revenues grew 238.8% year-over-year to $40.63 million.
As of March 31, 2023, the company’s cash and cash equivalents came in at $85.87 million, compared to $69.78 million as of December 31, 2022. Total assets amounted to $298.14 million, compared to $295.28 million as of December 31, 2022.
The consensus revenue estimate of $180.51 million for the fiscal year ending December 2023 reflects an 80.9% year-over-year improvement. Likewise, the consensus revenue estimate of $267.86 million for the next fiscal year (ending December 2024) indicates a 48.4% rise year-over-year.
Moreover, the company surpassed the consensus revenue estimates in all four trailing quarters, which is impressive. The stock has gained 48% over the past year to close the last trading session at $4.53.
MNKD’s robust fundamentals are apparent in its POWR Ratings. The stock has an overall rating of B, equating to Buy in our proprietary rating system. The POWR Ratings are calculated by considering 118 different factors, each weighted to an optimal degree.
MNKD has an A grade for Growth and a B for Momentum. It is ranked #31 Biotech industry.
In addition to the POWR Ratings I’ve just highlighted, you can see MNKD’s ratings for Quality, Value, Stability, and Sentiment here.
POINT Biopharma Global Inc. (PNT)
PNT is a radiopharmaceutical company that is building a platform for the clinical development and commercialization of cancer-fighting radioligands. With a robust pipeline, their late-stage programs target prostate cancer and neuroendocrine tumors.
On May 15, PNT and IONETIX Corporation, a leading cyclotron technology and isotope manufacturing firm, joined forces to establish Ionetix Alpha Corp. (Ionetix-α). Ionetix-α is a newly formed subsidiary of IONETIX that aims to produce commercial-scale production of Good Manufacturing Practice (GMP) grade therapeutic isotopes.
This positions PNT uniquely in the emerging field of high-potential therapeutic modality, addressing a crucial rate-limiting factor in advancing next-generation radioligands.
Additionally, on April 4, a PNT subsidiary and Eckert & Ziegler reached an agreement for the supply of non-carrier-added Actinium-225 (Ac-225). Eckert & Ziegler will provide specified quantities of GMP grade Ac-225 to PNT to support the development of PNT's pipeline of next-generation radioligands based on Ac-225.
The agreement would contribute to PNT's continued research and development with Actinium-225, which is used as an active substance in cancer treatment. PNT also anticipates conducting its first phase 1 trial for the next-generation PSMA-targeted PNT2001 program, utilizing Ac-225, marking an important milestone in their progress.
For the first quarter that ended March 31, 2023, PNT’s other income increased considerably year-over-year to $5.69 billion. Its cash inflows from financing activities grew significantly from the year-ago value to $145.86 million. In addition, as of March 31, 2023, the company’s non-current assets stood at $123.94 billion, compared to $47.50 billion as of December 31, 2022.
Analysts expect PNT’s revenue to increase 150% year-over-year to $70.09 million for the ongoing fiscal year ending December 2024. Shares of PNT have gained 41.5% over the past month and 71.9% over the past six months to close the last trading session at $10.50.
PNT’s positive outlook is apparent in its POWR Ratings. The stock has an overall rating of B, equating to Buy in our proprietary rating system.
PNT has a B grade for Quality, Sentiment, and Value. It has ranked #34 within the Biotech industry.
Click here to access additional PNT ratings for Momentum, Stability, and Growth.
LAVA Therapeutics N.V. (LVTX)
Headquartered in Utrecht, the Netherlands, LVTX is a clinical-stage immuno-oncology company that specializes in cancer treatments. Through its Gammabody platform, LVTX creates bispecific antibodies that activate gamma delta T cells to elicit an anti-tumor immune response, leading to better outcomes for cancer patients.
On February 16, LVTX reported initial clinical data from the ongoing Phase 1/2a study of LAVA-1207 in therapy refractory metastatic castration-resistant prostate cancer (mCRPC) patients. Results from the first five cohorts demonstrate a positive safety profile for LAVA-1207 in this population.
The success of the ongoing Phase 1/2a study may attract investors and increase market value. In addition, successful development and approval could result in enhanced sales and potential partnerships, leading to long-term financial growth.
During the fourth quarter that ended December 31, 2022, LVTX's total revenue increased 147.7% year-over-year to $2.64 million. Its other current assets increased to $7.67 million as of December 31, 2022, up from $3.30 million as of December 31, 2021. Meanwhile, total assets grew by 3% year-over-year to reach $143.43 million as of December 31, 2022.
Over the past five days, the stock has gained 6.2% to close the last trading session at $1.90.
LVTX’s solid fundamentals are apparent in its POWR Ratings. The stock has an overall rating of B, translating to Buy in our proprietary rating system.
LVTX has an A grade for Sentiment and a B for Value. It has ranked #30 within the same industry.
Click here to access additional LVTX ratings (Quality, Stability, Growth, and Momentum).
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MNKD shares were trading at $4.36 per share on Tuesday afternoon, down $0.17 (-3.75%). Year-to-date, MNKD has declined -17.27%, versus a 8.12% rise in the benchmark S&P 500 index during the same period.
About the Author: Aanchal Sugandh
Aanchal's passion for financial markets drives her work as an investment analyst and journalist. She earned her bachelor's degree in finance and is pursuing the CFA program. She is proficient at assessing the long-term prospects of stocks with her fundamental analysis skills. Her goal is to help investors build portfolios with sustainable returns.
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