A handful of pharmaceutical stocks — including behemoths Pfizer and Amgen — are either eyeing buy points or have broken out after diving in June.
The stocks belong to Investor's Business Daily's Medical-Ethical Drugs and Medical-Biomed/Biotech industry groups. Both are highly ranked segments at the moment, rated No. 21 and 30, respectively, out of 197 groups IBD tracks.
Experts say interest is returning to the biotech industry after the segment plowed to a low point in June. Over the past three weeks, biotech shares have climbed 25% as of Friday's close. Pharmaceutical stocks have notched a 12% gain over the same period.
"With the rest of the stock market doing so poorly, people are seeing how beaten down biotech has been," Brad Loncar said in a message to IBD. Loncar provides the indexes for two biotech-focused exchange traded funds.
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The Biggest Pharmaceutical Stock
Pfizer is the biggest name in the group. The pharmaceutical stock is eyeing a buy point at 61.81 out of a consolidation, according to MarketSmith.com.
Today Pfizer is well known for its BioNTech-partnered Covid shot. The company also sells Paxlovid, an antiviral pill for Covid patients at risk of severe disease. In the first quarter alone, the vaccine and Paxlovid generated a collective $14.7 billion in sales, accounting for 57% of Pfizer's total revenue.
Beyond Covid, Pfizer's best-known wares include blockbuster breast cancer treatment Ibrance, blood thinner Eliquis and an anti-inflammatory drug called Xeljanz. Of those three, only Eliquis sales grew in the last quarter. Xeljanz sales fell by a double-digit percentage due to competition from newer drugs.
Still, Pfizer shares lead the industry group of pharmaceutical stocks. It has a perfect Composite Rating of 99. This means Pfizer stock is in the top 1% of all stocks in terms of fundamental and technical metrics, according to IBD Digital.
The stock also has a strong Relative Strength Rating of 94, putting it in the leading 6% of all stocks for 12-month performance.
Pfizer ended Monday's session with a 0.5% loss at 52.89.
Biotech Stocks Eye Breakouts
The rest of the pharmaceutical stocks belong to the biotech industry group.
Amgen has a market cap of $132.3 billion, leading the group. Its shares are approaching an entry at 258.55 out of a flat base on the weekly MarketSmith chart.
Amgen's biggest medicines are inflammation treatment Enbrel and osteoarthritis injection Prolia. Sales of the two drugs diverged in the first quarter, though, as Enbrel fell amid generic competition.
The pharmaceutical stock has strong Composite and RS ratings of 94 and 92, respectively.
Likewise, Incyte shares are consolidating with a buy point at 84.96. Incyte is known for its blockbuster medicine Jakafi, a treatment for graft vs. host disease. Graft vs. host disease is an immune condition that can occur in patients who need a stem cell or organ transplant.
Incyte stock has a strong RS Rating of 92, which puts shares in the top 8% of all stocks over the last 12 months of performance. The pharmaceutical stock also just crossed its 50-day line, a bullish sign.
Amgen fell 0.3% at Monday's close, ending the day at 247.78. Incyte did the opposite and gained 0.6%, rounding out the regular session at 80.96.
Already Broken Out
Meanwhile, BioMarin Pharmaceutical stock has already broken out of a double-bottom base with an entry at 86.69. Shares fell as much as 5.6% below their entry on June 30, but that wasn't enough to trigger a sell rule. Now, BioMarin has returned to its buy zone, which runs from 86.69 to 91.02.
BioMarin's bestselling product is Vimizim, which treats a rare inherited birth defect that prevents the body from absorbing the nutrients it needs for physical development. First-quarter sales surged by a double-digit percentage.
BioMarin stock ranks a lofty No. 18 out of nearly 900 biotech companies IBD tracks. The pharmaceutical stock has a strong Composite Rating of 94 with its RS Rating trailing at 93.
Shares of BioMarin dipped 1.4%, ending Monday's session at 87.82.
Follow Allison Gatlin on Twitter at @IBD_AGatlin.
