This corner of health care could bounce back big despite recent volatility.
Amid the uncertainty of 2022, many investors have rotated out of the growth-oriented sectors of the past few years and into more value-oriented sectors. That means slow-and-steady dividend payers like utility stocks are hanging tough, while more aggressive firms have suffered. Biotech stocks are among this latter group, as many of these innovative companies are burning cash as they research the next generation of potential cures. But as the old saying goes, sometimes the time to be greedy is when others are being fearful — and before the rest of Wall Street piles in to drive a significant rebound. The following eight biotech stocks all carry risk, however a number of them have actually moved higher, even in this tough market.
Alkermes PLC (ticker: ALKS)
Dublin-based Alkermes may not be one of the top biotech stocks that stand out to U.S. investors. However, it’s among the best performers in any sector, with more than 20% gains year to date even as the S&P 500 has dropped by more than double digits. That’s in part thanks to an April earnings report where ALKS delivered better-than-expected revenue and earnings in Q1, but also because of a bright future based on the current product pipeline. Investors are particularly optimistic about news that the company continues to roll out its potentially lucrative antipsychotic drug Lybalvi ahead of schedule. They are also buoyed by the above-expected performance of its recently approved substance abuse treatment Vivitrol and the 31% revenue growth for its antipsychotic treatment Aristada. All that points to continued upside for this top-performing biotech stock.
BioMarin Pharmaceutical Inc. (BMRN)
A $15 billion biotech stock that has moved into consistent profitability in 2022, BioMarin is doing much better than the typical S&P 500 component since Jan. 1. And with projections of 15% revenue expansion this fiscal year and an additional 30% growth rate projected for fiscal year 2023, there’s clearly a wind at the back of this health care company. As a biotech stock that focuses on rare disease gene therapy, BMRN is highly specialized but also has the potential to create highly profitable drugs in categories that others are ignoring. That means it is a likely buyout candidate by a bigger pharmaceutical company looking to fill in some blanks and bolster its growth prospects.
CRISPR Therapeutics AG (CRSP)
The $4 billion CRISPR is a Switzerland-based biotechnology leader known for its cutting-edge platform to support gene editing and related development of genomic DNA medicines. It has a portfolio of therapies across a range of disease areas, including treatments for blood disorders, specialized cancers and other rare conditions. With strategic partnerships that include major players such as Bayer AG (BAYRY) and Vertex Pharmaceuticals Inc. (VRTX), this company may not yet be profitable but has a bright future based on its research and expertise.
Exelixis Inc. (EXEL)
Exelixis is a biotechnology stock with a focused mission fighting cancers, with a profitable operation valued at about $7 billion and a diverse portfolio of treatments. These include its Cabometyx drug for advanced renal cell carcinoma, Cometriq for thyroid cancer and Cotellic to treat advanced melanoma, among other products. Exelixis is also deeply connected to Big Pharma mainstays, including Takeda Pharmaceutical Co. (TAK), Bristol-Myers Squibb Co. (BMY) and Roche subsidiary Genentech to name a few. The dedicated oncology operations of EXEL give it specialized expertise, as well as the chance for continued upside as many forms of cancer continue to exist without effective or accessible treatment for some patients.
Global Blood Therapeutics Inc. (GBT)
Biopharmaceutical company Global Blood Therapeutics is a smaller firm than others on this list, valued at only about $2 billion with under $300 million in sales predicted this fiscal year. However, it specializes in treatments for underserved patient communities with sickle cell disease and related blood disorders, making it a niche play in an area without material competition. And based on the growth rate of more than 40% in revenue this year and a projected 65% growth rate next year, all indications are that GBT is delivering on its specialized mission. Through May 4, these strong fundamentals have lifted this biotech stock to nearly 10% gains since Jan. 1, even in a down market for the rest of Wall Street.
Ionis Pharmaceuticals (IONS)
Among one of the industry’s very best performers in 2022, IONS has managed to swim upstream in an otherwise challenging market with gains of more than 25% since Jan. 1. This is a company with a lot going for it, including cutting-edge technology to create RNA-targeted therapeutics and a robust pipeline of more than 40 first-in-class or best-in-class medicines for conditions including kidney disease, neurological conditions and rare metabolic disorders. It also boasts multiple strategic alliances, and the acquisition of peer Akcea Therapeutics back in 2020 continues to pay off via new potential cures that could power future revenue.
Sarepta Therapeutics Inc. (SRPT)
Sarepta is a leader in specialized muscular dystrophy drugs, with four approved treatments on the market and several others in the pipeline to maintain its dominance in this category. Though still a development-stage drugmaker that is not yet consistently profitable, SRPT is putting up strong top-line growth including 26% revenue expansion this year and projections of 20% growth on top of that in 2023. While the recent sell-off on Wall Street has taken its toll on shares, long-term investors may want to consider this biotech stock based on its successful track record in developing new treatments for a very specific area without a lot of other existing medicines.
Vir Biotechnology Inc. (VIR)
Recently, Vir has been under pressure thanks to the very unfortunate fact that it was conducting trials on a key hepatitis treatment in Ukraine and the surrounding regions. That, along with a general “risk off” mentality on Wall Street that has worked against biotechs, has taken a significant toll on share prices in the last few months. But VIR has a lot going for it, with a number of recent updates to its extensive hepatitis drug portfolio. Despite only being about five years old, the company also had early COVID-19 success in a partnership with heavyweight GlaxoSmithKline PLC (GSK) to produce an antibody treatment for the virus. Like all stocks in the sector there is risk here, but there are also good signs that VIR has the research chops to deliver in the long-run after the current volatility and disruption wanes.
8 best biotech stocks to buy in 2022:
— Alkermes PLC (ALKS)
— BioMarin Pharmaceutical Inc. (BMRN)
— CRISPR Therapeutics AG (CRSP)
— Exelixis Inc. (EXEL)
— Global Blood Therapeutics Inc. (GBT)
— Ionis Pharmaceuticals (IONS)
— Sarepta Therapeutics Inc. (SRPT)
— Vir Biotechnology Inc (VIR)
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8 Best Biotech Stocks to Buy in 2022 originally appeared on usnews.com
