The 3 Most Undervalued Biotech Stocks to Buy in January
Companies within the biotechnology industry are very interesting to investors because they see wild swings in share price following positive or negative news, particularly in the case of small biotech companies. Investing in biotech and other pharmaceutical stocks can be risky because their price action can be so swift and unpredictable.
Investors looking for some riskier options for their portfolio biotech companies may be a good choice due to the possibility of significant upside. But, it is best to have little exposure to these companies and not to have a large portion of an investment portfolio riding on biotech stocks.
In the interest of undervalued companies, listed below are a few examples of biotech stocks that have had positive news recently and still offer investors the potential for share price appreciation.
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Alkermes (ALKS)
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Alkermes (NASDAQ:ALKS), located in Dublin, Ireland, operates as a biopharmaceutical company that develops, manufactures and distributes products to treat psychiatric and neurological disorders such as schizophrenia, bipolar and narcolepsy. Their headline-making drugs at this moment are Olanzapine and Samidorphan, that help to treat pediatric psychiatric disorders, which are in Phase 3 trials. ALKS 2680, which is a drug to treat narcolepsy has recently finished Phase 2 trials.
Alkermes reported earnings for the third quarter of 2023 on Oct. 25, which stated that their total revenue increased by 51% compared to the previous year. They also reported earnings per share of twenty-eight cents per share for the third quarter. Their jump in overall revenue is partly due to the increased profitability of Lybalvi, their flagship psychiatric drug, which saw a year-over-year increase in sales of 87%.
Recently, ALKS also announced that they would be splitting off their oncology business, which is now called Mural Oncology (NASDAQ:MURA). Now, Alkermes operates a pure-play neuroscience business.
Alkermes has seen positive news regarding total sales of their most popular treatments, and with the company working to specialize its product development, this is a company investors should keep an eye out for.
MacroGenics (MGNX)
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MacroGenics (NASDAQ:MGNX) is a pharmaceutical company with a broad range of treatments for different types of cancer. Their flagship medication at this time is Margenza, which is used to treat breast cancer. They also have several other therapies in phase 1 and 2 trials that treat melanoma and solid tumors.
On Nov. 6, MacroGenics reported earnings for the third quarter, which stated that their total revenue dipped by 75% year-over-year and their net income for Q3 2023 was $18 million compared to Q3 2022, in which it was a net loss of $25 million.
The stock price for MGNX has doubled in the last six months. In late December, it was announced that Citi upgraded its rating for MacroGenics due to the positive data regarding their treatment for prostate cancer, which is still in clinical trials. Upon this news, their share price rose by 13%.
MacroGenics is a stock that has seen some substantial growth within the last few months due to its somewhat positive earnings result, and investors are beginning to feel more comfortable investing in the company, especially after their rating upgrade.
Heron Therapeutics (HRTX)
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Heron Therapeutics (NASDAQ:HRTX) is a biotech company that offers treatments for adverse effects following operations and chemotherapy, such as pain and nausea.
On Nov. 14, the company reported third-quarter earnings, which stated that their total product sales increased by 18%, and their net loss shrank by 40%. Heron’s acute care products saw a jump in revenue of 74%, and their oncology business also experienced an increase in total revenue of 12% within the same time period.
Over the past year, their share price has fallen by 32%. However, they did experience a surge in their stock price on Jan. 8. It was announced that Heron would partner with CrossLink Life Sciences to expand their sales network for Zynrelef, a treatment for post-operative pain.
Heron has seen growth in their two main businesses and entered a strong five-year partnership with CrossLink Life Sciences, leading to a positive outlook for the company in the near term.
As of this writing, Noah Bolton did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Noah has about a year of freelance writing experience. He’s worked with Investopedia dealing with topics such as the stock market and financial news.
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