Biotech stocks have suffered significant setbacks during the first half of the year. Investors had little appetite for innovation-driven companies, seeking safe haven in more traditional stocks delivering steady profits.
“Clinical trial failures, regulatory setbacks, drug pricing concerns and a lull in M&A all contributed to the slowdown,” said Brian Abrahams, Co-Head of Biotechnology Research at Endpoints. “On the whole, the sector has slowed too much. There are increasingly compelling valuations among large caps and reward/risk setups among smaller caps.”
At present, however, biotech stocks remain under stress. For example, the NASDAQ Biotechnology Index has fallen 25% year-to-date (YTD).
Research and innovation have always been key drivers for the biotech shares. Despite recent challenges, the industry is likely to bounce back in the future.
With that information, here are seven biotech stocks to buy in July:
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52-week range: $187.16 – $396.89
Biogen (NASDAQ:BIIB) specializes in neuroscience, specifically multiple sclerosis (MS), spinal muscular atrophy (SPA), and Alzheimer’s. It manufactures eleven marketed therapies and has more than two dozen treatments in the pipeline.
In early May, Biogen reported Q1 financials. Revenue was $2.5 billion, representing a 5% decline in constant currency YOY. Diluted EPS was $3.62, compared to $5.34 the year before. Free cash flow (FCF) was $103.9 million.
Recently, Biogen entered into a license and collaboration agreement with Alectos Therapeutics to develop and commercialize a new treatment for Parkinson’s disease.
AL01811 is a selective GBA2 inhibitor, shown to slow the progression of the disease. As there are currently no approved disease-modifying therapies for Parkinson’s, this treatment would be the first of its kind.
BIIB stock has fallen around 13% YTD. Shares are trading at 12.3 times forward earnings and 2.7 times sales. Meanwhile, the 12-month median price forecast stands at $225, making this one of the biotech stocks with some room to grow.
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52-week range: $119.73 – $457.93
Germany-based BioNTech (NASDAQ:BNTX) develops messenger ribonucleic acid (mRNA) based medicines and vaccines. In partnership with Pfizer (NYSE:PSE), BioNTech developed the world’s first Covid-19 vaccine.
In early May, BioNTech presented Q1 earnings. Revenue was 6.4 billion euros, compared to 2.0 billion euros the year before. Diluted EPS was 14.24 euros, compared to 4.39 euros the previous year. Cash and equivalents totaled 6.2 billion euros.
The U.S. Food and Drug Administration (FDA) recently granted an emergency use authorization (EUA) for the Pzifer-BioNTech Covid-19 Vaccine for children between six months and four years of age.
The vaccination will be administered as a series of three 3 μg doses. Research shows this amount provides the same level of antibody response as the 30 μg doses delivered to adults.
So far in 2022, BNTX stock has lost about 42% of its value, which isn’t uncommon among high-flyng biotech stocks. Forward P/E and P/S numbers are 3.47 and 1.48, respectively. Finally, the 12-month median price forecast stands at $252.96.
Gilead Sciences (GILD)
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52-week range: $57.16 – $74.12
Gilead Sciences (NASDAQ:GILD) focuses primarily on antiviral drugs to treat such diseases as HIV, hepatitis and influenza. In addition, its portfolio includes treatments for cancer, and heart and liver diseases.
In late April, Gilead released Q1 metrics. Revenue increased 3% YOY to $6.6 billion. Diluted EPS was $2.12, compared to $2.04 the year before. FCF was $1.6 billion.
The biopharma group recently announced positive trial results for three of its cancer treatments. Yescarta, a chimeric antigen receptor (CAR) T-cell therapy, was demonstrated to be safe and effective in addition to being superior to the current standards of care for treating lymphoma.
Moreover, Trodelvy increased progression-free and overall survival rates in breast cancer patients. Tecartus, another CAR T-cell therapy, was also shown to increase the overall survival rate in patients with lymphoma.
GILD wasn’t among the most battered biotech stocks, giving back just 13% since the beginning of the year but is supported by a 4.73% dividend yield. Shares are trading at 9.03 times forward earnings and 2.68 times sales. Analysts’ 12-month median price forecast stands at $67.
Halozyme Therapeutics (HALO)
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52-week range: $31.36 – $48.58
Halozyme Therapeutics (NASDAQ:HALO) is a biotech company whose primary focus revolves around its patented enzyme, rHuPH20.
The company’s main technology is Enhanze, which uses this enzyme as a drug-delivery platform. Revenue is primarily generated through the licensing of this technology to pharmaceutical companies.
In early May, Halozyme presented Q1 financials. Revenue was $117.3 million, representing a 32% increase YOY. Diluted EPS was 47 cents, compared with 37 cents the prior year. Cash and equivalents totaled $117.8 million.
The company recently completed its acquisition of Antares Pharma, which develops a series of auto-injectors used to self-deliver various medications. The combination of Halozyme and Antares will create a leading drug delivery and specialty product company.
Investors on HALO stock are keeping a close eye on how this recent transaction. Management expects both top-line and bottom-line growth acceleration and enhanced cash-flow generation through 2027.
HALO shares gained more than 14% YTD, making it one of the better performing biotech stocks. Forward P/E and P/S numbers are 22.88 and 13.72, respectively. Meanwhile, the 12-month median price forecast stands at $55.50.
52-week range: $194.67 – $285.61
IQVIA (NYSE:IQV) provides advanced analytics, technology solutions as well as clinical research services to the life sciences industry.
The company leverages data analytics, and artificial intelligence (AI) to provide essential services. Additionally, it maintains a database of more than 1.2 billion anonymous patient records.
In late April, IQVIA provided Q1 results. Revenue was $3.6 billion, an increase of 6.8% YOY in constant currency. Adjusted diluted EPS was $2.47, compared to $2.18 the year before. FCF was $331 million.
Recently, the company launched OCE+, the first in a series of planned advancements to its Orchestrated Customer Engagement (OCE) platform.
OCE+ uses data and advanced analytics to deliver AI-driven recommendations directly into the daily workflows of life sciences commercial teams. Wall Street is keeping an eye on how the increased use of technology can further add to the top line.
So far in 2022, IQV stock has fallen 22%. Forward P/E and P/S numbers are 20.00 and 2.80, respectively. Finally, the 12-month median price forecast stands at $255 making this one of the biotech stocks with upside ahead.
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52-week range: $115.61 – $497.49
Moderna (NASDAQ:MRNA) specializes in the use of mRNA to develop various therapies, primarily vaccines.
Its sole commercial product is the well-known Covid-19 vaccine. Revenues generated from the vaccine are currently being used to fund a pipeline of 44 products, 25 of which are in ongoing clinical trials.
In early May, Moderna reported Q1 earnings. Total revenue was $6.1 billion, compared to $1.9 billion the year before. Diluted EPS was $8.58, compared to $2.84 a year ago. Cash and equivalents totaled $5.0 billion.
Recently, the FDA granted the EUA for Moderna’s Cocid-19 vaccine as a single 25 μg dose for children six months through five years of age.
Additionally, approval was granted for a 50 μg two-dose regimen for children ages six through eleven and a 100 μg two-dose regimen for adolescents aged 12 through 17. Analysts expect the increased distribution of the vaccine to add to top line growth.
MRNA stock has tumbled 38% YTD, making it one of the more attractive biotech stocks to pick up at a discount. Shares are trading at 5.16 times forward earnings and 2.45 times sales. Lastly, the 12-month median price forecast for MRNA stock stands at $199.
United Therapeutics (UTHR)
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52-week range: $158.38 – $236.06
United Therapeutics (NASDAQ:UTHR) focuses on developing novel pharmaceutical therapies that expand the availability of transplantable organs.
It is the first publicly-traded biotech company to take the form of a public benefit corporation (PBC).
In early May, management presented Q1 metrics. Total revenue grew 22% YOY to $461.9 million. Diluted net income per share was $5.02, compared to 61 cents the previous year. Cash and equivalents totaled $3.8 billion.
They are the most complex 3D-printed objects ever, consisting of a record 44 trillion voxels. The scaffolds will use a patient’s own stem cells to create transplantable human lungs that do not require immunosuppression to prevent rejection.
UTHR stock has appreciated nearly 14% YTD. Shares are trading at 13.83 times forward earnings and 5.93 times sales. Wall Street’s 12-month median price forecast stands at $247.00.
On the date of publication, Tezcan Gecgil,Ph.D., did not have (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.
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