The biotech industry witnessed significant gains amid the pandemic. The United States biotech research and development expenditure amounted to $88.42 billion in 2020, the highest worldwide. As global medical needs continue to surge, the importance of the biotech industry is palpable.
This momentum is expected to persist amid an aging population as the requirement for more advanced medical research, and development continues to rise.
Moreover, biotechnologies are gradually becoming crucial for the basic needs of all nations: feeding, fueling, and healing their people, protecting the environment, and manufacturing the materials that keep societies running.
Furthermore, the global biotechnology market is expected to grow at a CAGR of 8.7% from 2022-2030. Investors' interest in biotech stocks is evident from the iShares Biotechnology ETF's (IBB) 20.6% gains over the past six months.
Given the backdrop, fundamentally sound biotech stocks Exelixis, Inc. (EXEL), Innoviva, Inc. (INVA), and Cidara Therapeutics, Inc. (CDTX), which are currently trading under $20, might be ideal buys now.
Exelixis, Inc. (EXEL)
Oncology-based biotechnology company EXEL is focused on discovering, developing, and commercializing new medicines to treat cancers. The company's platform also provides therapies to cancer patients with additional treatment options.
On November 3, 2022, EXEL and Catalent, Inc. (CTLT) announced their new license agreement. Under the agreement, CTLT's Redwood Bioscience subsidiary will grant EXEL an exclusive license to three target programs with lead antibody and ADC candidates.
Peter Lamb, Ph.D., Executive Vice President, Scientific Strategy and Chief Scientific Officer, EXEL, said, "We are excited for this new opportunity to continue our work together to advance additional programs that have the potential to provide patients with new therapeutic options."
EXEL's forward EV/Sales of 2.30x is 38.9% lower than the industry average of 3.76x. Its forward Price/Sales of 2.02x is 21% lower than the industry average of 2.56x.
EXEL's total revenue increased 25.4% year-over-year to $411.74 million for the third quarter that ended September 30, 2022. Its net profit came in at $73.21 million, up 91.6% year-over-year. Moreover, its EPS came in at $0.23, up 91.7% year-over-year.
Analysts expect EXEL's revenue to increase 13.8% year-over-year to $1.82 billion in 2023. Its EPS is estimated to grow 102% year-over-year to $1.01 in 2023. It has surpassed EPS estimates in all four trailing quarters. EXEL's shares have gained intraday to close the last trading session at $15.69.
EXEL's overall B rating equates to a Buy in our POWR Ratings system. The POWR Ratings assess stocks by 118 different factors, each with its own weighting.
It has an A grade for Value and a B for Quality. Within the Biotech industry, it is ranked #21 out of 376 stocks. Click here to see the additional POWR Ratings for Growth, Momentum, Stability, and Sentiment for EXEL.
Innoviva, Inc. (INVA)
INVA engages in developing and commercializing pharmaceuticals in the United States and internationally.
On November 30, 2022, INVA announced a landmark achievement. The U.S. Food and Drug Administration accepted its new drug application for SUL-DUR for Priority Review, an investigational drug for treating infections caused by the Acinetobacter baumannii-calcoaceticus complex.
INVA's forward EV/Sales of 3.37x is 10.2% lower than the industry average of 3.76x. Its forward Price/Sales of 1.03x is 59.6% lower than the industry average of 2.56x.
INVA's net income came in at $265.52 million for the third quarter that ended September 30, 2022, up 266.6% year-over-year. Its EPS increased 211.1% year-over-year to $2.80. Also, its total assets came in at $1.33 billion for the period ended September 30, 2022, compared to $926.40 million for the period ended December 31, 2021.
INVA's revenue is expected to be $337.18 million in 2022. Its EPS is estimated to grow 31.7% year-over-year to $3.78 in 2022. Over the past three months, the stock has gained 5.3% to close the last trading session at $12.83.
INVA's overall B rating equates to a Buy in our POWR Ratings system. It has an A grade for Value and a B for Quality. It is ranked #19 in the same industry.
We've also rated INVA for Momentum, Sentiment, Growth, and Stability. Get all INVA ratings here.
Cidara Therapeutics, Inc. (CDTX)
Biotechnology company CDTX focuses on discovering, developing, and commercializing long-acting anti-infectives for treating and preventing infectious diseases and oncology in the United States.
On December 1, 2022, CDTX announced that the U.S. Patent and Trademark Office issued U.S. Patent No. 11,510,992, entitled Compositions and Methods for the Treatment of Viral Infections, for CD388, a highly potent, long-acting drug-Fc conjugate designed to achieve universal prevention of seasonal and pandemic influenza. This is CDTX's first U.S. patent for flu and paves for further research and trials.
CDTX's forward Price/Sales of 0.53x is 87.2% lower than the industry average of 4.11x.
CDTX's total revenue increased 475.8% year-over-year to $40.74 million for the third quarter that ended September 30, 2022. Moreover, its net profit came in at $11.90 million, compared to a net loss of $18.08 million in the year-ago period. Additionally, its EPS came in at $0.17, compared to a loss per share of $0.37 in the year-ago period.
Analysts expect CDTX's revenue to increase 30.3% year-over-year to $64.59 million in 2022. Its EPS is estimated to grow 61.2% per annum for the next five years. It has surpassed EPS estimates in three out of four trailing quarters. Over the past six months, the stock has gained marginally to close the last trading session at $0.48.
CDTX has an overall A rating, equating to a Strong Buy in our POWR Ratings system. It has an A grade for Growth and Sentiment and a B for Value and Quality. It is ranked #7 in the same industry.
We've also rated CDTX for Momentum and Stability. Get all CDTX ratings here.
EXEL shares were trading at $15.67 per share on Wednesday morning, down $0.02 (-0.13%). Year-to-date, EXEL has declined -14.28%, versus a -17.98% rise in the benchmark S&P 500 index during the same period.
About the Author: RashmiKumari
Rashmi is passionate about capital markets, wealth management, and financial regulatory issues, which led her to pursue a career as an investment analyst. With a master's degree in commerce, she aspires to make complex financial matters understandable for individual investors and help them make appropriate investment decisions.
3 Biotech Stocks to Buy for Under $20 Right Now StockNews.com
