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Four Biotech Stocks That Popped More Than 50% in 2018
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The Zacks Medical-Biomedical and Genetics industry has underperformed the S&P 500 so far this year, declining 20.7% compared with the S&P 500’s decrease of 2.7%.
The Zacks Medical-Biomedical and Genetics industry consists of several large as well as small pharma companies. The larger companies, which hold the majority of the industry’s market capitalization, have a strong commercial and under-development pipeline candidates. These companies have a strong balance sheet and a steady stream of revenues. However, majority of companies in the sector are small with few to no marketed drugs. Most of these companies are in development-stage especially with focus on diseases which are rare to treat or have significant unmet need like fatty liver, uncommon cancer indications and others.
Some of these clinical stage biotech companies are dependent on just one pipeline candidate. Consequently, the success or failure of their key pipeline candidates in clinical studies can significantly drive the stock’s price and also the entire industry’s stock market performance. These companies are also affected by gaining or losing a partnership deal with any big pharma company as the latter provides significant funding for research.
These smaller innovative companies, in general, had a rather weak 2018, the principle reason being pivotal study failures involving key pipeline candidates. In fact, the industry also missed the push from larger biotech stocks as their performances have been mixed so far.
Tax reforms and cash repatriation policies had fueled merger and acquisition (M&A) activity earlier in the year. However, M&A and collaboration deals dried up in the latter half probably as acquisition targets became expensive. Moreover, the competition is intensifying with many companies fighting to bring their therapies to the market.
Stocks in Focus
Here we have zeroed in on four companies which have performed well by significantly beating the industry despite the gloomy scenario. These biotech companies’ share price has increased more than 50% so far this year.
Vericel sports a Zacks Rank #1. The Zacks Consensus Estimate for loss has narrowed 31% and 91% for 2018 and 2019, respectively, in the past 60 days. The company surpassed earnings estimates in three of the past four quarters with average beat of 54.88%. Shares of the company have rallied 213.8% in 2018.
Genomic Health, Inc.
Genomic Health sports a Zacks Rank #1. The Zacks Consensus Estimate for earnings has moved up by 86% and 35.2% for 2018 and 2019, respectively, in the past 60 days. The company surpassed earnings estimates in three of the past four quarters with average beat of 302.58%. Shares of the company have rallied 92.9% year to date.
Vanda sports a Zacks Rank #1. The Zacks Consensus Estimate for earnings has moved up by 112.5% and 11% for 2018 and 2019, respectively, in the past 60 days. The company surpassed earnings estimates in the past four quarters with average beat of 736.67%. Shares of the company have rallied 69.5% so far this year.
NuCana carries a Zacks Rank #2. The Zacks Consensus Estimate for loss has narrowed 34.1% and 24% for 2018 and 2019, respectively, in the past 60 days. The company surpassed earnings estimates in two of the past four quarters with an average beat of 37.81%. Shares of the company have rallied 61.2% in 2018.
In addition to the stocks discussed above, would you like to know about our 10 top tickers to buy and hold for the entirety of 2019?
Image: Bigstock
Four Biotech Stocks That Popped More Than 50% in 2018
The Zacks Medical-Biomedical and Genetics industry has underperformed the S&P 500 so far this year, declining 20.7% compared with the S&P 500’s decrease of 2.7%.
The Zacks Medical-Biomedical and Genetics industry consists of several large as well as small pharma companies. The larger companies, which hold the majority of the industry’s market capitalization, have a strong commercial and under-development pipeline candidates. These companies have a strong balance sheet and a steady stream of revenues. However, majority of companies in the sector are small with few to no marketed drugs. Most of these companies are in development-stage especially with focus on diseases which are rare to treat or have significant unmet need like fatty liver, uncommon cancer indications and others.
Some of these clinical stage biotech companies are dependent on just one pipeline candidate. Consequently, the success or failure of their key pipeline candidates in clinical studies can significantly drive the stock’s price and also the entire industry’s stock market performance. These companies are also affected by gaining or losing a partnership deal with any big pharma company as the latter provides significant funding for research.
These smaller innovative companies, in general, had a rather weak 2018, the principle reason being pivotal study failures involving key pipeline candidates. In fact, the industry also missed the push from larger biotech stocks as their performances have been mixed so far.
Tax reforms and cash repatriation policies had fueled merger and acquisition (M&A) activity earlier in the year. However, M&A and collaboration deals dried up in the latter half probably as acquisition targets became expensive. Moreover, the competition is intensifying with many companies fighting to bring their therapies to the market.
Stocks in Focus
Here we have zeroed in on four companies which have performed well by significantly beating the industry despite the gloomy scenario. These biotech companies’ share price has increased more than 50% so far this year.
These stocks carry a Zacks Rank #1 (Strong Buy) or 2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Importantly, the Zacks Medical-Biomedical and Genetics industry features among the top 25% of the 255 Zacks-ranked industries.
Vericel Corporation (VCEL - Free Report)
Vericel sports a Zacks Rank #1. The Zacks Consensus Estimate for loss has narrowed 31% and 91% for 2018 and 2019, respectively, in the past 60 days. The company surpassed earnings estimates in three of the past four quarters with average beat of 54.88%. Shares of the company have rallied 213.8% in 2018.
Genomic Health, Inc.
Genomic Health sports a Zacks Rank #1. The Zacks Consensus Estimate for earnings has moved up by 86% and 35.2% for 2018 and 2019, respectively, in the past 60 days. The company surpassed earnings estimates in three of the past four quarters with average beat of 302.58%. Shares of the company have rallied 92.9% year to date.
Vanda Pharmaceuticals Inc. (VNDA - Free Report)
Vanda sports a Zacks Rank #1. The Zacks Consensus Estimate for earnings has moved up by 112.5% and 11% for 2018 and 2019, respectively, in the past 60 days. The company surpassed earnings estimates in the past four quarters with average beat of 736.67%. Shares of the company have rallied 69.5% so far this year.
NuCana PLC (NCNA - Free Report)
NuCana carries a Zacks Rank #2. The Zacks Consensus Estimate for loss has narrowed 34.1% and 24% for 2018 and 2019, respectively, in the past 60 days. The company surpassed earnings estimates in two of the past four quarters with an average beat of 37.81%. Shares of the company have rallied 61.2% in 2018.
In addition to the stocks discussed above, would you like to know about our 10 top tickers to buy and hold for the entirety of 2019?
These 10 are painstakingly handpicked from over 4,000 companies covered by the Zacks Rank. They are our primary picks poised to outperform in the year ahead. Be among the first to see the new Zacks Top 10 Stocks >>