Advances in life sciences are benefitting healthcare interventions and productivity by incorporating innovative technology. Moreover, with government spending and biotech being defensive.
As the industry shows solid potential, fundamentally strong biotech stocks Amicus Therapeutics, Inc. (FOLD), Corcept Therapeutics Incorporated (CORT), and Harmony Biosciences Holdings, Inc. (HRMY) might be solid buys.
Biotechnology has become simple due to technological advancements, as a growing number of key market players develop and launch new products to expand their market share. Furthermore, the emergence of COVID-19, which has increased the demand for vaccine development, has fuelled the growth of the biotechnology market.
According to the Data Bridge Market Research, the biotechnology market is expected to grow at a CAGR of 29% to $10.13 trillion by 2030.
Raj Lala, president, and CEO of Evolve Funds, told INN that he expects healthcare stocks to remain resilient to current market challenges this year. Also, whether the US will enter a recession is up for debate, but the fund executive said that even if it does, biotech companies will “continue to perform well” since investors tend to prefer “defensive sectors.”
“Healthcare stocks are perceived to be stable companies that offer products people need even during a recession,” Lala explained.
In addition, lucrative government initiatives, such as President Biden’s National Biotechnology and Biomanufacturing Initiative, could bolster the industry’s growth in the near future.
Let’s discuss the stocks mentioned above in detail:
Amicus Therapeutics, Inc. (FOLD)
FOLD focuses on discovering, developing, and delivering medicines for rare diseases.
On April 26, 2023, FOLD announced that the Committee for Medicinal Products for Human Use (CHMP) of the European Medicines Agency (EMA) adopted a positive opinion recommending marketing authorization of miglustat, the enzyme stabilizer component of AT-GAA.
A decision for miglustat from the European Commission is expected in the third quarter of 2023, after which the two-component therapy will be fully approved, and the Company will begin the country-by-country reimbursement and launch process.
On March 27, FOLD announced that the European Commission had granted approval for Pombiliti (cipaglucosidase alfa), a long-term enzyme replacement therapy (ERT) used in combination with miglustat for adults with late-onset Pompe disease (LOPD).
The Company has submitted the previously requested analytical testing for miglustat, the enzyme stabilizer component of AT-GAA. The Committee for Medicinal Products for Human Use (CHMP) opinion for miglustat is expected in the second quarter of 2023.
Its trailing-12-month asset turnover ratio of 0.44x is 24.6% higher than the 0.35x industry average. Its trailing-12-month gross profit margin of 88.73% is 59% higher than the 55.84% industry average.
During the fiscal first quarter ended March 31, 2023, FOLD’s net product sales increased 14.7% year-over-year to $86.27 million. Net loss attributable to common stockholders decreased 37.9% year-over-year to $52.93 million, while its net loss attributable to common stockholders per common share decreased 40% year-over-year to $0.18.
FOLD’s revenue is expected to increase 11% year-over-year to $89.60 million for the fiscal second quarter ending June 2023.
Shares of FOLD have gained 85.7% over the past year to close the last trading session at $11.68.
FOLD’s POWR Ratings reflect its promising 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.
The stock has a B grade for Growth and Momentum. It is ranked #29 out of 376 stocks in the Biotech industry.
Beyond what is stated above, we’ve also rated FOLD for Sentiment, Quality, Value, and Stability. Get all FOLD ratings here.
Corcept Therapeutics Incorporated (CORT)
CORT engages in discovery and development of drugs for the treatment of severe metabolic, oncologic, endocrine, and neurological disorders in the United States.
Its trailing-12-month EBITDA margin of 24.50% is significantly higher than the 1.88% industry average. Its trailing-12-month gross profit margin of 98.67% is 76.7% higher than the 55.84% industry average.
CORT’s net product revenues rose 39.6% year-over-year to $119.13 million in the fiscal first quarter that ended March 31, 2023. Non-GAAP net income increased 28.9% year-over-year to $40.13 million. Non-GAAP net income per share increased 29.4% year-over-year to $0.66.
Street expects CORT’s revenue for the fiscal second quarter ending June 2023 to increase 6.1% year-over-year to $109.66 million. Its EPS is expected to be $0.15 for the same quarter.
The stock has gained 38% over the past year to close the last trading session at $23.91.
CORT’s robust prospects are reflected in its POWR Ratings. The stock has an overall B rating, equating to a Buy in our proprietary rating system.
CORT has an A grade for Quality and a B in Value and Momentum. It is ranked #22 in the same industry.
Click here to see the additional POWR Ratings for CORT (Growth, Stability, and Sentiment).
Harmony Biosciences Holdings, Inc. (HRMY)
HRMY is a a commercial-stage pharmaceutical company focuses on developing and commercializing therapies for patients with rare and other neurological diseases in the United States.
Its trailing-12-month EBITDA margin of 33.35% is significantly higher than the 1.84% industry average. Its trailing-12-month gross profit margin of 81.02% is 44.4% higher than the 56.12% industry average.
HRMY’s net product revenues increased 39.6% year-over-year to $119.13 million in the first quarter that ended March 31, 2023. Also, its net income increased 37.2% year-over-year to $29.49 million, and EPS increased 37.1% year-over-year to $0.48.
HRMY’s revenue is expected to increase 33.8% year-over-year to $143.17 million for the fiscal second quarter ending June 2023. The company’s EPS for the same quarter is expected to increase 73.9% year-over-year to $0.68.
HRMY gained 14.6% over the past month to close its last trading session at $36.31.
HRMY’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.
HRMY also has an A grade for Value and a B in Momentum and Quality. It is ranked #23 in the same industry.
For additional ratings for HRMY’s Growth, Stability, and Sentiment, click here.
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FOLD shares were unchanged in premarket trading Friday. Year-to-date, FOLD has declined -4.34%, versus a 8.55% rise in the benchmark S&P 500 index during the same period.
About the Author: Nidhi Agarwal
Nidhi is passionate about the capital market and wealth management, which led her to pursue a career as an investment analyst. She holds a bachelor's degree in finance and marketing and is pursuing the CFA program. Her fundamental approach to analyzing stocks helps investors identify the best investment opportunities.
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