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May 28, 2021

Top Biotech Stocks for Q2 2021XBIT, BDSI, and ACRS are top for value, growth, and momentum.


The biotechnology industry includes companies that develop drugs and diagnostic technologies for the treatment of diseases and medical conditions. These products must go through a rigorous, costly, and time-consuming trials before potentially obtaining approval from the U.S. Food and Drug Administration (FDA). This means that investors may wait for years before knowing whether a drug under development will pay off. The selection includes smaller start-up companies with recent traction as well as large, well-established corporations that aim to develop a range of drugs and technologies. Many biotech companies have shifted their focus entirely or added COVID-19 vaccine and treatments to their product pipeline. During the past year, biotech stocks, as represented by the iShares Nasdaq Biotechnology ETF (IBB), have posted a total return of 37.8% compared to the Russell 1000's total return of 46.9% as of March, 2021.1

 All data below are as of March 9, 2021.

Here are the top nine biotech stocks with the best value, the fastest earnings growth, and the most momentum.

Best Value Biotech Stocks

These are the biotech stocks with the lowest 12-month trailing price-to-earnings (P/E) ratio. Because profits can be returned to shareholders in the form of dividends and buybacks, a low P/E ratio shows you’re paying less for each dollar of profit generated.

Best Value Biotech Stocks

                                        Price ($)           Market Cap ($B)   12-Month Trailing P/E Ratio

XBiotech Inc. ( XBIT)                 19.36               0.6                                1.2

Catalyst 

Pharmaceuticals Inc.( CPRX)      3.70              0.4                                 5.5

Innoviva Inc. ( INVA)                  11.63            1.2                                  5.8

Source: YCharts

  • XBiotech Inc.: XBiotech is a biopharmaceutical company that specializes in developing antibody therapies for a cancer treatment, inflammatory diseases, and infectious diseases. It is working on a wider range of therapies harnessing antibodies to treat viruses like COVID-19 and influenza. One of the products they are testing is a therapy that uses antibodies from patients that have recovered from COVID-19 to help treat current COVID-19 patients. 2
  • Catalyst Pharmaceuticals Inc.: Catalyst Pharmaceuticals is a biopharmaceutical company that specializes in therapies for rare neurological and neuromuscular diseases. It announced its fourth-quarter and 2020 financial results on March 15, 2021, reporting a 16% increase in revenue for fiscal 2020 and a 30% increase in operating income.3
  • Innoviva Inc.: Innoviva is a healthcare-focused asset management company that holds a portfolio of royalties from a variety of pharmaceuticals. The company’s revenue increased 20% year-over-year from 2019 to 2020, and it's operating income increased by 30.4%.4

Fastest-Growing Biotech Stocks

These are the biotech stocks with the highest YOY earnings per share (EPS) growth for the most recent quarter. Rising earnings show that a company’s business is growing and generating more money that it can reinvest or return to shareholders.

Fastest-Growing Biotech Stocks

 

                                              Price ($)              Market Cap ($B)                  EPS Growth                                                                                                                           (%)

BioDelivery Sciences 

International Inc. ( BDSI)                   4.10                 0.4                                   2,570

Neurocrine Biosciences 

Inc. ( NBIX)                                        91.0               18.6                                   922.9

Seagen Inc. ( SGEN)                         150.56              27.3                                  542.9

Source: YCharts

  • BioDelivery Sciences Inc.: BioDelivery Sciences is a pharmaceutical company producing prescription medication for patients with serious chronic conditions. Its full-year net revenue in 2020 jumped 40% compared to a year before, with fourth-quarter revenue growing 33% from the same period in 2019. BELBUCA, an opioid-containing drug, was the main driver behind this growth posting $35.6 million in net sales.5
  • Neurocrine Biosciences Inc.: Neurocrine Biosciences focuses on developing treatments for challenging neurological or psychiatric disorders that tend to be overlooked or under-diagnosed. Pharmaceutical products include treatments for Schizophrenia, Parkinson's disease, tardive dyskinesia, uterine fibroids and endometriosis. In 2020, the company reported total annual revenue of over $1 billion, a 33% increase over the previous year. 6
  • Seagen Inc.: Seagen produces monoclonal antibody-based therapies focusing on the treatment of cancer. The company’s total revenue for 2020 jumped to $2.2 billion, compared to $916.7 million the year before, a 140% increase. 7

Biotech Stocks with the Most Momentum

These are the biotech stocks with the highest total return over the last 12 months.

Biotech Stocks with the Most Momentum

                                            Price ($)      Market Cap ($B)    12-Month Trailing Total                                                                                                             Return (%)

Aclaris Therapeutics ( ACRS)   22.47                 1.2                           2,170

Ocugen Inc. ( OCGN)                8.78               1.7                            2,120

Novavax Inc. ( NVAX)              169.90             12.6                             1,600

Source: YCharts

  • Aclaris Therapeutics Inc.: Aclaris Therapeutics is a biopharmaceutical company specializing in the development of new drugs to treat immune-inflammatory diseases like severe rheumatoid arthritis. The company posted a net loss of $51.0 million for the full year of 2020 compared to a loss of $161.4 million the year before. 
  • Ocugen Inc.: Ocugen is a biopharmaceutical company focusing on therapies for blindness and other retinal diseases. It is working with Indian biotech firm Bharat Biotech to develop a new COVID-19 vaccine called COVAXIN. The company’s Indian partner Bharat Biotech has been given limited emergency use authorization by the Indian government to administer its vaccine without a label saying "clinical trial mode," boosting Ocugen’s plans to develop the COVID-19 vaccine for other markets. 
  • Novavax Inc.: Novavax is a clinical stage biotechnology company that creates vaccines to address a wide range of infectious diseases. Novavax is one of the biggest comeback stories of the Covid-19 pandemic. It was on the brink of failure before the global shutdown, and now its vaccine candidate looks like a strong competitor to existing vaccines. In fact, early analysis suggests its vaccine “may be one of the first shown to stem asymptomatic spread of the coronavirus and also potentially provide longer-lasting protection,” according to the Wall Street Journal.

Article Sources:

  1. YCharts. "YCharts." Accessed March 9, 2021.

  2. Nasdaq.com. “XBiotech Candidate True Human™ COVID-19 Therapy Found to Target Highly Infectious Emerging Strain.” Accessed March 9, 2021.

  3. Catalyst Pharmaceuticals Inc. “Catalyst Pharmaceuticals Announces Fourth Quarter and Year-End 2020 Financial Results and Provides Corporate Update." Accessed March 17, 2021.

  4. Innoviva Inc. “Innoviva Reports Fourth Quarter 2020 Financial Results.” Accessed March 11, 2021.

  5. BioDelivery Sciences Inc. “BioDelivery Sciences Reports Strong Q4 and Record Full-Year 2020 Results.” Accessed March 11, 2021.

  6. Neurocrine Biosciences Inc. “Neurocrine Biosciences Reports Fourth Quarter and Full-Year 2020 Financial Results.” Accessed March 11, 2021.

  7. Seagen Inc. “Seagen Reports Fourth Quarter and Full Year 2020 Financial Results.” Accessed March 11, 2021.

  8. Aclaris Therapeutics Inc. “Aclaris Therapeutics Reports Fourth Quarter and Full Year 2020 Financial Results and Provides a Corporate Update.” Accessed March 11, 2021.

  9. The Indian Express. "Bharat Biotech’s Covaxin allowed to drop ‘clinical trial mode’ label." Accessed March 18, 2021.

  10. Ocugen Inc. “Ocugen’s COVID-19 Vaccine Co-Development Partner, Bharat Biotech shares Phase 3 Interim Results of COVAXIN, Demonstrates Efficacy of 81%.” Accessed March 11, 2021.

  11. The Wall Street Journal. “Novavax Nears Covid-19 Vaccine Game Changer—After Years of Failure.” Accessed March 11, 2021.

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