The biotechnology industry has witnessed continuing advancements over the years, thanks to strong demand for improved research and development and breakthrough products. Furthermore, President Biden’s 2023 budget includes $49 billion for the Advanced Research Projects Agency for Health and the National Institutes of Health. The funding should boost biotech research programs to new levels.
Amid an aging global population, the need for improved medical diagnoses and treatments is rising. In addition, occasional viral outbreaks and chronic lifestyle diseases are expected to drive growth in the biotech sector. According to Report Ocean, the global biotechnology market is predicted to grow at a 7.5% CAGR from 2022 to 2030.
Given this backdrop, we think the stocks of fundamentally sound biotech companies Biogen Inc. (BIIB), BioNTech SE (BNTX), and Incyte Corporation (INCY) could be solid additions to one portfolio now. These stocks have an overall Buy rating in our proprietary POWR Ratings system.
Click here to checkout our Healthcare Sector Report for 2022
Biogen Inc. (BIIB)
A pioneer in neuroscience, BIIB in Cambridge, Mass., discovers, develops, and delivers worldwide innovative therapies for treating people with severe neurological and neurodegenerative diseases. In addition to a plethora of medicines to treat multiple sclerosis, BIIB has introduced the first approved treatment for spinal muscular atrophy.
On May 3, 2022, Michel Vounatsos, BIIB’s CEO, said, “We have a strong balance sheet, enabling us to advance a broad pipeline that includes lecanemab in Alzheimer’s disease and zuranolone in depression, while also pursuing new internal and external growth opportunities.”
BIIB’s revenue from its anti-CD20 therapeutic programs came in at $399.40 million, up 2.7% year-over-year, for the first quarter ended March 31, 2022. Its total current assets were $7.92 billion for the period ended March 31, 2022, compared to $7.86 billion for the period ended Dec. 31, 2021. Also, its total current liabilities were $3.95 billion, compared to $4.30 billion, for the same period.
For its fiscal 2023, analysts expect BIIB’s EPS to grow 3.5% year-over-year to $16.07. In addition, it surpassed the consensus EPS estimates in three of the trailing four quarters. The stock closed yesterday’s trading session at $194.32.
BIIB’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall B rating, which indicates a Buy in our proprietary rating system. The POWR Ratings assess stocks by 118 distinct factors, each with its own weighting.
BIIB has an A grade for Value and a B grade for Quality. It is ranked #13 of 386 stocks in the Biotech industry. Click here to see BIIB’s Growth, Momentum, Stability, and Sentiment ratings.
BioNTech SE (BNTX)
Headquartered in Mainz, Germany, BNTX, a biotechnology company, develops and commercializes immunotherapies for cancer and other infectious diseases. It has collaborations with Genentech, Inc.; Sanofi S.A.; Genmab A/S; Pfizer Inc.; Shanghai Fosun Pharmaceutical (Group) Co., Ltd.; and Regeneron Pharmaceuticals, Inc.
On May 9, 2022, Ugur Sahin, BNTX’s M.D., CEO and Co-Founder, said, “We have enhanced our COVID-19 vaccine leadership and reported encouraging data for our first-in-human CAR-T therapy in solid tumors. Driven by our execution in innovation, we believe we are well positioned to achieve multiple product launches in the coming years, which would facilitate significant long-term growth.”
BNTX’s total revenues came in at €6.37 billion ($6.63 billion) for the quarter ended March 31, 2022, up 211.2% year-over-year. Its profit for the period was €3.70 billion ($3.85 billion), up 227.9% year-over-year, while its EPS came in at €14.24, up 224.4% year-over-year.
BNTX surpassed the consensus EPS estimates in each of the trailing four quarters. BNTX closed yesterday’s session at $158.00.
BNTX has an overall B grade, which equates to a Buy in our POWR Ratings system. It has an A grade for Value and a B grade for Sentiment. It is ranked #19 in the Biotech industry. Click here to see the additional ratings for BNTX (Growth, Momentum, Stability, and Quality).
Incyte Corporation (INCY)
Biopharmaceutical company, INCY, focuses on the discovery, development, and commercialization of proprietary therapeutics in the United States and internationally. The company offers JAKAFI; PEMAZYRE; and ICLUSIG. INVY is headquartered in Wilmington, Del.
On May 5, 2022, INCY announced the European Commission’s approval of its product, Jakavi® (ruxolitinib), to treat patients aged 12 years and older with acute or chronic GVHD. The therapy is expected to improve GVHD treatment procedures and might lead to solid revenue generation for the company soon.
For the first quarter, ended March 31, 2022, INCY’s revenues came in at $733.24 million, representing a 21.3% year-over-year rise. Its income from operations came in at $116.54 million, up 18% year-over-year. Furthermore, its cash and cash equivalents came in at $2.54 billion for the period ended March 31, 2022, compared to $2.35 billion, for the period ended Dec. 31, 2021.
Analysts expect INCY’s revenue to increase 15.4% year-over-year to $3.89 billion in 2023. Its EPS is expected to increase 44.5% to $4.64 in 2023. Over the past six months, the stock has gained 15.1% in price to close yesterday’s trading session at $75.51.
It is no surprise that INCY has an overall B rating, which equates to a Buy in our proprietary rating system. In addition, it has a B grade for Value and Quality.
INCY is ranked #17 in the Biotech industry. We have also rated the stock for Growth, Momentum, Stability, and Sentiment. Click here to get all the INCY ratings.
Click here to checkout our Healthcare Sector Report for 2022
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BIIB shares were trading at $199.53 per share on Friday afternoon, up $5.21 (+2.68%). Year-to-date, BIIB has declined -16.83%, versus a -15.02% rise in the benchmark S&P 500 index during the same period.
About the Author: Riddhima Chakraborty
Riddhima is a financial journalist with a passion for analyzing financial instruments. With a master's degree in economics, she helps investors make informed investment decisions through her insightful commentaries.
3 Buy-Rated Biotechs to Buy in May StockNews.com
