Biotechnology stocks are among the most high-risk, high-reward stocks in the market. Many biotech companies are working to develop one or even a handful of world-changing drugs to address multibillion-dollar markets. The fates of these often volatile stocks are tied closely to study data and approval decisions from the U.S. Food and Drug Administration or other drug regulators. The biotech industry struggled as a whole in 2023, but analysts say the innovation that has always supported the biotech industry is alive and well.
[Sign up for stock news with our Invested newsletter.]
Here are six of the top biotech stocks to buy that Argus analysts love:
| Stock | Implied upside from May 21 Close |
| Vertex Pharmaceuticals Inc. (ticker: VRTX) | 5.2% |
| Regeneron Pharmaceuticals Inc. (REGN) | 6.6% |
| IQVIA Holdings Inc. (IQV) | 30.8% |
| Charles River Laboratories International Inc. (CRL) | 30.9% |
| Bio-Techne Corp. (TECH) | 14.9% |
| United Therapeutics Corp. (UTHR) | 1.7% |
Vertex Pharmaceuticals Inc. (VRTX)
Vertex Pharmaceuticals is a biopharmaceutical company that specializes in developing therapies to treat cystic fibrosis (CF). Vertex also owns the rights to 60% of the profits from sales of CRISPR Therapeutics AG’s (CRSP
) gene-editing therapy exa-cel, which was approved by the FDA for treating sickle cell disease in December 2023 and for treating transfusion-dependent beta thalassemia (TDT) just six weeks later. Analyst Jasper Hellweg says Vertex could be positioned to treat 90% of all global CF patients if it gains regulatory approval for expanded indications of its CF drugs. Argus has a “buy” rating and $465 price target for VRTX stock, which closed at $442 on May 21.
Regeneron Pharmaceuticals Inc. (REGN)
Regeneron Pharmaceuticals is a biotech company focused on developing therapies to treat metabolic disorders, inflammatory diseases, cancer and respiratory conditions. Hellweg says Regeneron has several positive catalysts ahead in the next 12 months, including potential U.S. and European regulatory approvals of odronextamab for treating relapsed/refractory follicular lymphoma and relapsed/refractory diffuse large B-cell lymphoma. Regeneron could also potentially gain approval for linvoseltamab to treat patients with relapsed/refractory multiple myeloma. In addition, the FDA could expand Dupixent’s label to include chronic obstructive pulmonary disease (COPD). Argus has a “buy” rating and $1,060 price target for REGN stock, which closed at $993.95 on May 21.
IQVIA Holdings Inc. (IQV)
IQVIA is a clinical research company that provides health care data solutions. Analyst David Toung says IQVIA is delivering impressive new order growth, and he anticipates more favorable market conditions ahead. Toung projects accelerated revenue growth and margin expansion in the second half of 2024, and he says the company’s long-cycle business model insulates it from cyclical market downturns. Toung says IQVIA has a track record of technological innovation, has recently landed several impressive contracts, has a valuable collection of health care data and has exceptional revenue visibility. Argus has a “buy” rating and $300 price target for IQV stock, which closed at $229.38 on May 21.
[READ: 10 Best Growth Stocks to Buy for 2024]
Charles River Laboratories International Inc. (CRL)
Charles River Laboratories provides purpose-bred rodents for drug testing, drug discovery and safety and manufacturing services. Toung says cautious spending by the biopharma industry will remain a headwind for Charles River in 2024. However, he says revenue growth and operating margins will improve in the second half of the year as large biopharma companies and contract manufacturers resume order activity for consumables and reagents. Charles River also recently upped its ownership stake in non-human primates (NHPs) research model provider Noveprim, which Toung says will help improve overall margins. Argus has a “buy” rating and $290 price target for CRL stock, which closed at $221.48 on May 21.
Bio-Techne Corp. (TECH)
Bio-Techne develops, manufactures and sells biotechnology reagents and instruments for the research and clinical diagnostic markets. Toung says Bio-Techne’s end markets and profit margins are improving, and the company’s U.S. sales are growing. Meanwhile, he says European sales are stable, and Bio-Techne’s China business is recovering. While the stock isn’t necessarily cheap, trading at more than 30 times Argus’ fiscal 2025 earnings per share estimate, Toung says the premium valuation is warranted given the company’s several long-term growth drivers and opportunities to expand its addressable market via tuck-in acquisitions. Argus has a “buy” rating and $95 price target for TECH stock, which closed at $82.68 on May 21.
United Therapeutics Corp. (UTHR)
United Therapeutics is a commercial biopharmaceutical company focused on treating pulmonary arterial hypertension (PAH). Hellweg says treprostinil is the company’s leading drug and cash cow, including its inhalable form Tyvaso for treating PAH. The company is also testing treprostinil in treating idiopathic pulmonary fibrosis (IPF) and progressive pulmonary fibrosis (PPF). Hellweg says United’s strong balance sheet and potential new indications for treprostinil suggest the stock has significant upside in the next year. He is also bullish on United’s promising organ transplant and manufacturing program. Argus has a “buy” rating and $280 price target for UTHR stock, which closed at $275.19 on May 21.
[See: Artificial Intelligence Stocks: The 10 Best AI Companies.]
More from U.S. News
2024’s 10 Best-Performing Stocks
8 Best High-Yield REITs to Buy
6 of the Best AI ETFs to Buy Now
6 Best Biotech Stocks to Buy for 2024 originally appeared on usnews.com
Update 05/22/24: This story was published at an earlier date and has been updated with new information.
