Neurocrine Biosciences and Vertex Pharmaceuticals are among five medical stocks to put on your radar this week, as the sector shows some resilience amid a broader market downturn. BioMarin Pharmaceuticals, Centene and Insulet round out the list. These medical stocks have recently pulled back to key support levels and could offer buying opportunities.
Neurocrine Stock
The San Diego-based biotech is poised for accelerated sales in the second half of 2022 and beyond. The company sells a movement disorder treatment called Ingrezza. Ingrezza took in $350 million in net sales in Q2, growing by double digits and beating forecasts.
Neurocrine also raised its Ingrezza sales outlook for the year to $1.35 billion to $1.4 billion.
"We had an extremely good first half of the year and I'm really looking forward to continued growth in the second half of the year," said CEO Kevin Gorman in an earnings call with investors on Aug. 4. "We've made significant investments in Ingrezza over the last six to 12 months, and we expect those to increase our pace — increase our reach to our patient population as the year progresses."
Meanwhile, the company boasts a robust pipeline, as it develops drugs for schizophrenia, depression and an adrenal disorder, among others.
Additionally, Neurocrine on Aug. 31 said it agreed to pay $57 million to take over U.K.-based Diurnal. The merger would add Diurnal's Alkindi for pediatric adrenal insufficiency and Efmody for congenital adrenal hyperplasia (CAH) to Neurocrine's portfolio.
NBIX stock jumped 8.5% on the strong earnings news, breaking out of a base and racing up to a 52-week high of 109.26 in the following days, according to MarketSmith.
Shares have pulled back in the past few weeks, trading around the 21-day moving average.
NBIX stock is holding above its 50-day line, which roughly corresponds with the old 100.10 buy point. Technically, shares are in a buy range. A pullback to the 50-day or 10-week line wouldn't be a shock.
Neurocrine stock's relative strength line is at a year high. Shares also have a promising Composite Rating of 96 and a Relative Strength Rating of 94 out of a best-possible 99.
Vertex Stock
The Boston-based maker of drugs to treat cystic fibrosis is a Leaderboard stock. The company posted Q2 sales of $2.2 billion, a 22% jump year over year. A big chunk of those sales come from CF treatment Trikafta.
Vertex is also pushing to expand its roster. It has partnered with Crispr Therapeutics on a gene-editing approach to a pair of blood diseases. It's also teamed up with privately held ViaCyte to work on a diabetes treatment.
Vertex's other projects include testing treatments for liver and kidney diseases. Rival AbbVie has shelved its experimental drug to treat CF due to poor clinical trial results, a plus for Vertex.
VRTX stock popped above its 50-day line after the company posted strong earnings and raised guidance on Aug. 4. Shares rose to a 52-week high of $305.95 in the week that followed, but then reversed lower.
VRTX stock tried to bounce above its 50-day line late in the week, but reversed lower Friday with the market. A rebound above Friday's highs could offer an early entry, but overall market conditions add to such risks.
Its RS Rating is 96, while its EPS Rating is a top-notch 99.
BioMarin Stock
The San Rafael, Calif.-based company makes medicines that treat rare genetic diseases and medical conditions, such as Duchenne muscular dystrophy and hemophilia A.
BioMarin earnings grew in the latest quarter, snapping a three-quarter decline. And while earnings are expected to decline for the rest of 2022, a big gain is seen for 2023, according to FactSet.
On Aug. 24, BioMarin said European regulators approved its gene therapy for hemophilia A, the more common version of the rare bleeding disorder. The treatment, known as Roctavian, is for adults with severe disease.
BioMarin EVP and Chief Commercial Officer Jeffrey Ajer said the drug will be launched first in Germany, the largest market for severe hemophilia, followed by France.
The Food and Drug Administration has not yet approved the treatment. BioMarin expects a decision by mid-2023.
After reporting earnings, shares surged to highs not seen since Aug. 2020. But BMRN stock has since pulled back to its 50-day line, technically in a buy zone.
A strong bounce off the 50-day line could offer an early entry for BioMarin stock, but market conditions raise the risk of a downside reversal.
Meanwhile, its relative strength line is ticking upward, with its RS Rating standing at 93. And its EPS Rating is 88.
Centene Stock
Headquartered in St. Louis, Centene provides managed health care services through government-subsidized programs.
Centene's Q2 earnings rose 42% from a year ago to $1.77 per share, beating views by 9 cents. Revenue grew 16% to $35.94 billion. The health benefits ratio, or costs as a share of premiums, came in at 86.7%, down from 88.3% a year ago and better than estimates of 87.8%.
Centene notched 25% growth in its Medicare business.
The company hiked its outlook for full-year EPS to a range of $5.60-$5.75, up a nickel from guidance offered in June. Analysts had forecast $5.60. Centene also added $3 billion to its stock buyback program.
CNC stock gapped down on Aug. 26 to its 50-day line, where it's been trying to find support. Shares are technically back in an old buy zone from a double-bottom buy point of 87.44.
Insulet Stock
Insulet develops wireless, handheld insulin infusion systems for people with insulin-dependent diabetes.
Last month, the FDA gave the OK to extend use of Insulet's Omnipod 5 automated insulin pump to children aged 2 years and up with type 1 diabetes. It marks the first time a tubeless automated insulin delivery system has been authorized for use in children this young. The approval comes just seven months after the FDA cleared Omnipod 5 for patients 6 years and older.
Insulet posted a 50-cents-a-share loss in the latest quarter, but earnings are expected to ramp up this year and into 2023. FactSet analysts see the company ending 2022 with EPS of 43 cents and $1.45 in 2023.
PODD stock has a double-bottom buy point of 280.46, according to MarketSmith.
That comes after a 276.48 handle breakout failed almost immediately last month.
The stock's relative strength line is trending lower, although it has a decent RS Rating of 87. Its EPS Rating is just 36, given it has yet to prove itself with several quarters of earnings growth.
Follow Adelia Cellini Linecker on Twitter @IBD_Adelia.
