The scope and scale of the biotech industry are ever-expanding. Also, the growing integration of cutting-edge technology with biotechnology to accelerate innovation and drug candidate identification is creating new avenues for emerging and innovative biotech companies.
Given the industry’s positive prospects, it could be ideal to invest in quality biotech stocks Royalty Pharma PLC (RPRX), BioMarin Pharmaceutical Inc. (BMRN), and Biogen Inc. (BIIB) with huge upside based on analyst price targets.
In the recent past, the biotech industry has performed above expectations with innovations, the introduction of new technologies, demand for personalized medicines, and approvals like the first CRISPR gene therapy. Also, growing efforts to introduce novel cell and gene therapies to revolutionize patient lives are reshaping the landscape.
Also, factors like increasing funding, supportive government initiatives, growing industry partnerships and M&A activities, and emerging market stabilization are fueling the biotech industry’s outlook.
The global biotechnology market size is projected to hit around $4.61 trillion by 2034, exhibiting growth at a CAGR of 11.5%. Also, the U.S. biotechnology market is expected to grow to $830.31 billion by 2034 at a CAGR of 11.6%.
Furthermore, Generative AI in Biotech is paving new directions. The technology utilizes AI algorithms to design novel molecules, proteins, and drugs, revolutionizing drug discovery and development processes. Generative AI in the biotech market is expected to be worth $472 million by 2032, expanding at a notable CAGR of 24.9% during the forecast period.
Given the industry’s bright prospects, let’s delve into the fundamentals of the three best Biotech stock picks, starting with the third choice.
Stock #3: Royalty Pharma plc (RPRX)
RPRX operates as a buyer of biopharmaceutical royalties and a funder of innovations in the biopharmaceutical industry. The company is also engaged in the identification, evaluation, and acquisition of royalties on various biopharmaceutical therapies.
On September 3, RPRX and Ascendis Pharma Bone Diseases A/S, a wholly-owned subsidiary of Ascendis Pharma A/S, entered into a royalty funding agreement worth $150 million based on U.S. net sales of Yorvipath. The agreement expands the companies’ partnership aimed at supporting the continued development and commercialization of Endocrine Rare Disease products.
RPRX reported total income and other revenues of $537 million for the second quarter ended June 30, 2024, and its operating income increased 8.4% year-over-year to $270 million. Its adjusted EBITDA of $560 million indicates growth of 12.4% from the prior-year quarter.
Furthermore, net income attributable to RPRX stood at $102 million for the quarter. And its non-GAAP portfolio cash flow rose 11.2% year-over-year to $574 million.
The company updated its fiscal year 2024 financial outlook. RPRX raised its revenue projection to a range of $2.70 billion to $2.78 billion, up from the previous estimate of $2.60 billion to $2.70 billion.
Street expects RPRX’s revenue for the third quarter (ended September 2024) to increase 39.6% year-over-year to $748.66 million, and its EPS is expected to grow 17.1% year-over-year to $0.92 for the same quarter.
Shares of RPRX have surged 2.2% over the past year to close the last trading session at $27.36. Wall Street analysts expect the stock to hit $45.25 in the near term, indicating a potential upside of 63.77%.
RPRX’s POWR Ratings reflect its robust outlook. The stock has an overall rating of B, which translates to a Buy in our proprietary rating system. The POWR Ratings are calculated by considering 118 different factors, with each factor weighted to an optimal degree.
RPRX has a B grade for Sentiment and Growth. It is ranked #31 out of 331 stocks in the Biotech industry.
In addition to the POWR Ratings we’ve stated above, we also have RPRX’s other ratings for Value, Momentum, Stability, and Quality. Get all RPRX ratings here.
Stock #2: BioMarin Pharmaceutical Inc. (BMRN)
BMRN develops and commercializes therapies for people with severe and life-threatening rare diseases and medical conditions. The company’s commercial products include Vimizim, Naglazyme, and Kuvan.
On July 24, BMRN received the U.S. FDA approval for its BRINEURA (cerliponase alfa) to slow the loss of ambulation in children under three years with neuronal ceroid lipofuscinosis type 2 (CLN2 disease). The approval extended the treatment to all ages, including presymptomatic children.
During the second quarter that ended on June 30, 2024, BMRN’s total revenue increased 19.6% year-over-year to $712.03 million. Its non-GAAP income from operations grew 71.7% from the year-ago value to $221.80 million. The company’s non-GAAP net income and EPS came in at $188.90 million and $0.96, up 79.6% and 77.8% from the prior year’s quarter, respectively.
As per the updated financial guidance for the fiscal year 2024, BMRN’s revenue is projected to be between $2.75 billion and $2.83 billion. The company’s non-GAAP EPS is expected to range from $3.10 to $3.25.
Analysts expect BMRN’s revenue for the third quarter (ended September 2024) to increase 21% year-over-year to $703.31 million. For the same period, the company’s EPS is expected to grow 73.3% year-over-year to $0.80. Furthermore, it has surpassed the consensus EPS estimates in three of the trailing four quarters.
Shares of BMRN have declined 18.4% over the past month to close the last trading session at $68.69. Also, Wall Street analysts expect the stock to hit $105.95 in the near term, indicating a potential upside of 52.45%.
BMRN’s bright prospects are reflected in its POWR Ratings. The stock has an overall rating of B, equating to a Buy in our proprietary rating system.
The stock has an A grade for Growth. The stock also has a B grade for Sentiment and Value. BMRN is ranked #16 out of 331 stocks in the same industry.
Click here to access additional ratings of BMRN for Momentum, Quality, and Stability.
Stock #1: Biogen Inc. (BIIB)
BIIB discovers, develops, manufactures, and delivers therapies for treating neurological and neurodegenerative diseases internationally. The company offers TECFIDERA, VUMERITY, AVONEX, PLEGRIDY, TYSABRI, and FAMPYRA for multiple sclerosis (MS).
On September 20, BIIB and Samsung Bioepis Co., Ltd. received positive EMA Committee for Medicinal Products for Human Use (CHMP) opinion for its OPUVIZ™ 40 mg/mL solution for injection in a vial, a biosimilar referencing Eylea2 (aflibercept), also known as SB15.
OPUVIZ has been recommended for approval in adult patients for treating neovascular (wet) age-related macular degeneration (AMD). Post the recommendation, OPUVIZ can serve as a meaningful therapeutic option for individuals impacted by retinal vascular disorders.
On July 30, BIIB, Beckman Coulter, Inc., and Fujirebio announced a collaboration to potentially identify and develop blood-based biomarkers for tau pathology in the brain and to potentially clinically advance and potentially commercialize new tests for tau pathology in Alzheimer’s disease (AD).
For the second quarter of 2024, which ended June 30, 2024, BIIB’s total revenues increased marginally year-over-year to $2.46 billion. Non-GAAP total net income attributable to BIIB and non-GAAP EPS totaled $770.90 million and $5.28, reflecting increases of 31.9% and 31.3% from the prior year’s quarter, respectively.
Furthermore, the company’s free cash flow increased 42.4% from the year-ago value to $592.30 million.
The company updated its financial guidance for the fiscal year 2024. BIIB now forecasts non-GAAP EPS between $15.75 and $16.25, up from the previous $15 and $16 range.
Street expects BIIB’s revenue and EPS for the fourth quarter (ending December 2024) to increase 2.5% and 15.4% year-over-year to $2.45 billion and $3.40, respectively. Furthermore, the company surpassed the consensus EPS estimates in three of the four trailing quarters.
Over the past month, BIIB’s stock has plunged 8.6% to close the last trading session at $182.30. Wall Street analysts expect the stock to hit $268.55 in the near term, indicating a 45.61% upside potential.
BIIB’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall rating of A, translating to a Strong Buy in our proprietary rating system.
BIIB has an A grade for Value and a B grade for Sentiment and Growth. It is ranked #6 among the list of 331 stocks in the Biotech industry.
To access BIIB’s ratings for Quality, Stability, and Momentum, click here.
What To Do Next?
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BIIB shares were unchanged in after-hours trading Wednesday. Year-to-date, BIIB has declined -28.21%, versus a 22.57% rise in the benchmark S&P 500 index during the same period.
About the Author: Rjkumari Saxena
Rajkumari started her career as a writer but gradually shifted her focus to financial journalism, leveraging her educational background in Commerce. Fascinated by the interplay of business and economic shifts in equities, she aspires to evolve as an analyst. With a knack for simplifying complex financial concepts, her mission is to empower investors with insights that lead to profitable decisions.
3 Biotech Stocks With Huge Upside Based on Analyst Price Targets StockNews.com
