Biotech stocks retook their 50-day moving average in late October after positive results from Wave Life Sciences in editing RNA helped bolster the whole sector.
Still, the turnaround is far from peak levels in 2020 when the industry was thrust into the limelight. But as society learned to live with Covid — and other concerns around the economy and politics took center stage — interest in biotech fell by the wayside.
Investor's Business Daily's 732-company Medical-Biotech/Biomed industry group hit a 2024 high in mid-July. Shares have yo-yoed since. Today, the entire group is ranked No. 40 out of 197 groups IBD tracks.
Meanwhile, the pharma group ranks No. 95. Shares were above their 50-day line on Oct. 25.
The industry group has a Relative Strength Rating of 83, according to IBD Digital. This means the industry group now ranks in the top 17% of all industry groups in terms of 12-month performance.
But it's key to watch specific measures when examining stocks. In terms of fundamental and technical metrics, the best biotech stocks trading above 10 right now are:
- Corcept Therapeutics
- Harmony Biosciences
- ADMA Biologics
- Ligand Pharmaceuticals
- United Therapeutics
No. 1 Biotech Stock: Corcept
Corcept Therapeutics now leads the industry group of biotech stocks.
The company has a broad pipeline of treatments in testing for Cushing syndrome, cancer, neurological diseases, addiction and psychiatry. But it's best known for Korlym, a treatment for patients with Cushing syndrome who also have type 2 diabetes.
In the second quarter, Corcept reported adjusted earnings of 32 cents a share on $163.8 million in sales. Earnings surged 14% and beat expectations by 9 cents a share, sales also topped the Street's forecasts and rose more than 39%.
The biotech stock broke out of a cup base with a buy point at 39.75 on Sept. 17. Shares recently edged into the profit-taking zone. Investors are encouraged to take some profits when a stock rises 20% to 25% above its entry.
The biotech stock has a strong Composite Rating of 96 and a Relative Strength Rating of 97.
Corcept stock is also a Tech Leader.
Harmony's Pipeline In A Product
Biotech stock Harmony Biosciences is making a name for itself with a single product: pitolisant. The company sees the drug "as a portfolio in a product opportunity."
Today, pitolisant is approved as a narcolepsy treatment named Wakix. But Harmony is also investigating pitolisant in other conditions, including a sleeping disorder called idiopathic hypersomnia and a genetic disorder known as Prader-Willi syndrome.
In the second quarter, Wakix brought in $172.8 million in sales, surging 29% year over year. That was roughly in line with expectations for $172.5 million.
The biotech stock is below its 50-day line and is struggling to retake a buy point at 35.40 out of a consolidation. But Harmony stock has a strong Composite Rating of 96 and an RS Rating of 82.
Harmony also lands on the Tech Leaders list.
ADMA Stock Faces A Setback
ADMA Biologics was on a run — until Oct. 10 when its independent auditor unexpectedly resigned. The company kept its guidance for 2024 and 2025, but shares tumbled more than 16%.
The company is known for its human immune globulin products. These drugs are intravenous infusions for people with immunodeficiencies.
Shares rocketed 31% on Aug. 9 after the company reported adjusted earnings of 14 cents per share, walloping expectations for 8 cents. Earnings reversed from a year-earlier loss of 2 cents. Sales surged 78% year over year to $107.2 million, and handily topped calls for $86.4 million.
But the biotech stock is now below its 50-day line, though remains above its 200-day moving average. Still, it has best-possible Relative Strength and Composite ratings of 99.
The stock is also on the IBD Tech Leaders list, but has fallen off the IBD 50 list.
Ligand Reports Strong Second Quarter
Ligand Pharmaceuticals remains on the list of leading biotech stocks.
The company invests in royalty deals and boasts more than 100 partnered commercial and development-stage programs.
Recently, Ligand collaborator Merck received FDA approval for its pneumococcal vaccine for adults, Capvaxie. Ligand also agreed to acquire Apeiron Biologics for $100 million. The deal includes royalty rights to a cancer treatment called Qarziba. This is the sixth key asset added to Ligand's commercial-stage portfolio since the beginning of 2023.
Ligand partner Verona Pharma also won FDA approval for its inhaled treatment for chronic obstructive pulmonary disease, or COPD. Ligand will receive a low single-digit royalty on worldwide net sales of the drug, Ohtuvayre.
In the second quarter, Ligand easily beat expectations with adjusted income of $1.40 per share and $41.5 million in sales. Earnings fell by two pennies year over year, but sales rocketed 57.5%.
The biotech stock has a Composite Rating of 96 and a Relative Strength Rating of 93. Shares recently broke out of a cup-with-handle base with an entry at 108.83. On Oct. 24, shares edged into the 5% buy zone.
Ligand also lands on the IBD Tech Leaders list.
Focusing On Treatments For PAH
United Therapeutics is another top-rated biotech stock. The company makes a handful of drugs for chronic diseases.
Its biggest drug is Tyvaso, a treatment for pulmonary arterial hypertension, or PAH. During the June quarter, Tyvaso sales climbed 25% to $398.2 million. But that missed expectations for $403.3 million. The nebulized formulation drove the miss, bringing in $139.9 million in sales vs. forecasts for $150.9 million.
Analysts are closely watching United Therapeutics' pipeline. The company now expects to have the results of a final-phase PAH study in 2026 vs. prior expectations for 2025, Leerink Partners analyst Roanna Ruiz said in a report.
The biotech stock hit a record high intraday on Oct. 17, but has since dipped. United Therapeutics stock has a strong Composite Rating of 98, with a lower Relative Strength Rating of 90. Shares broke out of a flat base with a buy point at 366.08, but fell 6.6% below their entry on Oct. 23. Savvy investors are encouraged to sell when a stock falls 7% to 8% below its entry.
United Therapeutics stock lands on the Tech Leaders list as well.
Follow Allison Gatlin on X, the platform formerly known as Twitter, at @IBD_AGatlin.
