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4 Biotech Bets to Watch as Industry Rebounds in a Month
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Staging a turnaround, the biotech sector registered a rise in the past month after coping with a difficult preceding year. In the recent past, the sector witnessed some encouraging news in the form of positive data read outs on key pipeline drugs as well as favorable regulatory updates.
The biotech industry has gained 3.5% in the past month, outperforming the S& P 500 index’s gain of 1.9%.
The industry, however, declined 1.8% in the period from January to mid-June.
Particularly, the positive data read out from Biogen’s (BIIB - Free Report) mid-stage Alzheimer’s study on BAN2401, added an impetus to the stock. Data from the study showed that BAN2401 led to a statistically significant slowdown in disease progression and reduction of amyloid beta accumulation in the brain. The positive results gave investors much reason to cheer for as Alzheimer's Disease (AD) has always been a challenging market given the spate of study failures of late. So, the outcomes are deemed an important breakthrough by Biogen and Eisai in the AD market, thus raising hopes for a possible cure.
Further, the biotech sector also gained a boost when Celgene Corporation and its partner Acceleron Pharma Inc. (XLRN) reported positive findings from a second randomized, double-blind, multi-center clinical phase III study, BELIEVE, on pipeline candidate luspatercept. The results show that luspatercept achieved a highly statistically significant improvement in the primary endpoint of erythroid response as compared to placebo.
Generally, it is widely expected that the biotech/drug sector will rebound as the year progresses. We believe that successful innovation, strong clinical study results, frequent FDA nods, growing demand for drugs especially for rare-to-treat diseases, an aging population and increased health care spending are a few key factors that should keep the sector on track. A faster drug approval process and the proposed removal of outdated regulations that escalate costs and slow down innovation should also provide benefits.
Importantly, mergers and acquisitions (M&A) activity is ramping up with the tax reform in place. The new tax law, which cuts corporate tax rate from 35% to 21% and encourages companies to bring back huge cash held overseas at a one-time tax rate of 10%, is spurring merger activity this year.
Taking these factors into account, we can easily consider some stocks to be added to investors’ portfolio from the biotech industry. We will thus highlight four biotech stocks, worth picking with a bullish Zacks Rank #1(Strong Buy) or 2 (Buy) and a share price surge over the past month.You can see the complete list of today’s Zacks #1 Rank stocks here.
This Foster City, CA-based company has a Zacks Rank #2. Theearningsper share estimates have been revised upward from $6.10 to $6.12 for 2018 and from $6.34 to $6.36 for 2019 over the past 30 days. In the past month, the stock has grown 7.8%.
Intercept Pharmaceuticals Inc.
This New York-based company carries a Zacks Rank of 2. Theloss per share estimates have been narrowed from $11.43 to $11.15 for 2018 and from $8.17 to $7.79 for 2019 over the past 30 days. In the past month, the stock has rallied 13.9%.
Seattle Genetics Inc.
The Bothell, WA-based company is a Zacks #2 Ranked stock and its share price has climbed 5.9% in the past month.
This Zacks Rank #1 player has seen the Zacks Consensus Estimate for current-year earnings per share moving north to 20 cents from 18 cents and from 77 cents to 80 cents for next year over the past 30 days. The stock has gained 10.6% in the past month.
Will You Make a Fortune on the Shift to Electric Cars?
Here's another stock idea to consider. Much like petroleum 150 years ago, lithium power may soon shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge. With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research. It's not the one you think.
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4 Biotech Bets to Watch as Industry Rebounds in a Month
Staging a turnaround, the biotech sector registered a rise in the past month after coping with a difficult preceding year. In the recent past, the sector witnessed some encouraging news in the form of positive data read outs on key pipeline drugs as well as favorable regulatory updates.
The biotech industry has gained 3.5% in the past month, outperforming the S& P 500 index’s gain of 1.9%.
The industry, however, declined 1.8% in the period from January to mid-June.
Particularly, the positive data read out from Biogen’s (BIIB - Free Report) mid-stage Alzheimer’s study on BAN2401, added an impetus to the stock. Data from the study showed that BAN2401 led to a statistically significant slowdown in disease progression and reduction of amyloid beta accumulation in the brain. The positive results gave investors much reason to cheer for as Alzheimer's Disease (AD) has always been a challenging market given the spate of study failures of late. So, the outcomes are deemed an important breakthrough by Biogen and Eisai in the AD market, thus raising hopes for a possible cure.
Further, the biotech sector also gained a boost when Celgene Corporation and its partner Acceleron Pharma Inc. (XLRN) reported positive findings from a second randomized, double-blind, multi-center clinical phase III study, BELIEVE, on pipeline candidate luspatercept. The results show that luspatercept achieved a highly statistically significant improvement in the primary endpoint of erythroid response as compared to placebo.
Generally, it is widely expected that the biotech/drug sector will rebound as the year progresses. We believe that successful innovation, strong clinical study results, frequent FDA nods, growing demand for drugs especially for rare-to-treat diseases, an aging population and increased health care spending are a few key factors that should keep the sector on track. A faster drug approval process and the proposed removal of outdated regulations that escalate costs and slow down innovation should also provide benefits.
Importantly, mergers and acquisitions (M&A) activity is ramping up with the tax reform in place. The new tax law, which cuts corporate tax rate from 35% to 21% and encourages companies to bring back huge cash held overseas at a one-time tax rate of 10%, is spurring merger activity this year.
Taking these factors into account, we can easily consider some stocks to be added to investors’ portfolio from the biotech industry. We will thus highlight four biotech stocks, worth picking with a bullish Zacks Rank #1(Strong Buy) or 2 (Buy) and a share price surge over the past month.You can see the complete list of today’s Zacks #1 Rank stocks here.
Stocks to Buy
Gilead Sciences, Inc. (GILD - Free Report)
This Foster City, CA-based company has a Zacks Rank #2. Theearningsper share estimates have been revised upward from $6.10 to $6.12 for 2018 and from $6.34 to $6.36 for 2019 over the past 30 days. In the past month, the stock has grown 7.8%.
Intercept Pharmaceuticals Inc.
This New York-based company carries a Zacks Rank of 2. Theloss per share estimates have been narrowed from $11.43 to $11.15 for 2018 and from $8.17 to $7.79 for 2019 over the past 30 days. In the past month, the stock has rallied 13.9%.
Seattle Genetics Inc.
The Bothell, WA-based company is a Zacks #2 Ranked stock and its share price has climbed 5.9% in the past month.
Vanda Pharmaceuticals Inc. (VNDA - Free Report)
This Zacks Rank #1 player has seen the Zacks Consensus Estimate for current-year earnings per share moving north to 20 cents from 18 cents and from 77 cents to 80 cents for next year over the past 30 days. The stock has gained 10.6% in the past month.
Will You Make a Fortune on the Shift to Electric Cars?
Here's another stock idea to consider. Much like petroleum 150 years ago, lithium power may soon shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge. With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research. It's not the one you think.
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