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4 Big Drug/Biotech Stocks Up in Coronavirus-Hit Economy
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The drug/biotech sector has not escaped the onslaught of the coronavirus outbreak with the Zacks Large Cap Pharmaceuticals industry, comprising some of the biggest drugmakers in the world, declining 11.8% this year so far. Meanwhile, the Zacks Medical - Biomedical and Genetics industry, comprising both large and small biotech companies, has declined 11% this year. The NYSE ARCA Pharmaceutical Index has declined 10.8% this year.
The year began on a soft note for almost all big drugmakers/biotechs given their lukewarm results. Just when the space had started to recover, coronavirus struck. Apart from a few companies involved in making vaccines or treatments to prevent or treat coronavirus, the remaining drug/biotech sector players were not spared of the sell-off due to concerns about the economic impact of the outbreak across the globe.
In mid-February, AstraZeneca (AZN - Free Report) raised alarm bells about the outbreak weighing on its earnings in 2020. Many others are expected to follow suit. Needless to say this global pandemic is expected to have a significant impact on earnings of most of the big pharma in the first quarter.
Shares of almost all big drug/biotech companies are down this year so far mainly due to the coronavirus impact. However, here we have highlighted four bigshot drugmakers/biotechs whose stocks are up this year and discussed the reasons for the same.
A chart showing the share price movement of the four stocks this year so far is given below.
Regeneron is one of the few large biotech companies that have gained from the coronavirus crisis. Regeneron’s shares are up 24% this year so far. Last month, it signed an agreement with the U.S. Department of Health and Human Services (HHS) for manufacturing antibodies targeting SARS-CoV-2, the virus that causes the coronavirus disease COVID-19,.
Meanwhile, its key drugs — Eylea and Dupixent — have strengthened its product portfolio on continued label expansions. Its immuno-oncology platform, which includes Libtayo and a wide portfolio of bispecific antibodies, is progressing well with key candidates like evinacumab and pozelimab, among others.
Vertex’s shares are up 0.9% this year so far. Consistent positive regulatory approvals have led to an increase in the eligible patient population for Vertex’s approved cystic fibrosis(CF) medicines in the past 2-3 years. In 2019 alone, Vertex received nine new regulatory approvals or label expansions for its CF medicines globally. Also, in 2019, Vertex reached a number of key reimbursement agreements in important ex-U.S. countries like England and France, which expanded access to its CF medicines. With the approval of Trikafta in October 2019, its fourth CF medicine, approximately 45,000 patients worldwide are now eligible to be treated with one of Vertex’s four CF medicines. Vertex believes that revenue growth in 2020 will be primarily driven by the uptake of Trikafta as well as higher international revenues due to additional ex-U.S. reimbursement arrangements. Trikafta’s early approval and launch was a significant milestone for Vertex. Meanwhile, Vertex’s non-CF pipeline is also progressing rapidly with data in multiple diseases expected in 2020.Vertex has a Zacks Rank $2 (Buy).
Lilly was one of the few drug companies, which reported strong fourth-quarter results in January, beating estimates for both earnings and sales. The company also slightly raised its 2020 revenue guidance.
In 2020, Lilly’s revenue growth is expected to be driven by higher demand for newer drugs like including Trulicity, Jardiance, Taltz, Verzenio, Basaglar, Emgality as well as newly launched Baqsimi and Reyvow. Lilly is making significant pipeline progress with several positive late-stage data readouts and multiple regulatory updates scheduled for 2020. Lilly is also regularly adding promising new pipeline assets through business development deals. This year, Lilly bought dermatology company Dermira for approximately $1.1 billion. The deal added Dermira’s promising interleukin inhibitor for atopic dermatitis/eczema, lebrikizumab, thereby expanding Lilly’s immunology pipeline.
Shares of Gilead are up 8.9% this year so far. Gilead is another large biotech, which gained due to the coronavirus impact.
It has initiated two phase III studies to evaluate the safety and efficacy of its investigational antiviral candidate, remdesivir in adults diagnosed with COVID-19. These randomized open-label, multicenter studies will enroll approximately 1,000 patients at medical centers, primarily across Asian countries. The studies will assess two dosing durations of the candidate, administered intravenously. Remdesivir has been studied in people with Ebola virus infection.
Meanwhile, the World Health Organization recommended remdesivir as partial remedy for coronavirus though it has yet not been proven that the candidate can treat the disease. Remdesivir is reportedly being used to treat some U.S coronavirus patients on 'compassionate' grounds. It is likely that remdesivir could be available for commercial use in 4-5 months.
Meanwhile, earlier this month, Gilead announced that it will acquire a clinical-stage immuno-oncology company, Forty Seven for approximately $4.9 billion.
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4 Big Drug/Biotech Stocks Up in Coronavirus-Hit Economy
The drug/biotech sector has not escaped the onslaught of the coronavirus outbreak with the Zacks Large Cap Pharmaceuticals industry, comprising some of the biggest drugmakers in the world, declining 11.8% this year so far. Meanwhile, the Zacks Medical - Biomedical and Genetics industry, comprising both large and small biotech companies, has declined 11% this year. The NYSE ARCA Pharmaceutical Index has declined 10.8% this year.
The year began on a soft note for almost all big drugmakers/biotechs given their lukewarm results. Just when the space had started to recover, coronavirus struck. Apart from a few companies involved in making vaccines or treatments to prevent or treat coronavirus, the remaining drug/biotech sector players were not spared of the sell-off due to concerns about the economic impact of the outbreak across the globe.
In mid-February, AstraZeneca (AZN - Free Report) raised alarm bells about the outbreak weighing on its earnings in 2020. Many others are expected to follow suit. Needless to say this global pandemic is expected to have a significant impact on earnings of most of the big pharma in the first quarter.
Shares of almost all big drug/biotech companies are down this year so far mainly due to the coronavirus impact. However, here we have highlighted four bigshot drugmakers/biotechs whose stocks are up this year and discussed the reasons for the same.
A chart showing the share price movement of the four stocks this year so far is given below.
Regeneron Pharmaceuticals (REGN - Free Report)
Regeneron is one of the few large biotech companies that have gained from the coronavirus crisis. Regeneron’s shares are up 24% this year so far. Last month, it signed an agreement with the U.S. Department of Health and Human Services (HHS) for manufacturing antibodies targeting SARS-CoV-2, the virus that causes the coronavirus disease COVID-19,.
Meanwhile, its key drugs — Eylea and Dupixent — have strengthened its product portfolio on continued label expansions. Its immuno-oncology platform, which includes Libtayo and a wide portfolio of bispecific antibodies, is progressing well with key candidates like evinacumab and pozelimab, among others.
Regeneron has a Zacks Rank $1 (Strong Buy).You can see the complete list of today’s Zacks #1 Rank stocks here.
Vertex Pharmaceuticals Incorporated (VRTX)
Vertex’s shares are up 0.9% this year so far. Consistent positive regulatory approvals have led to an increase in the eligible patient population for Vertex’s approved cystic fibrosis(CF) medicines in the past 2-3 years. In 2019 alone, Vertex received nine new regulatory approvals or label expansions for its CF medicines globally. Also, in 2019, Vertex reached a number of key reimbursement agreements in important ex-U.S. countries like England and France, which expanded access to its CF medicines. With the approval of Trikafta in October 2019, its fourth CF medicine, approximately 45,000 patients worldwide are now eligible to be treated with one of Vertex’s four CF medicines. Vertex believes that revenue growth in 2020 will be primarily driven by the uptake of Trikafta as well as higher international revenues due to additional ex-U.S. reimbursement arrangements. Trikafta’s early approval and launch was a significant milestone for Vertex. Meanwhile, Vertex’s non-CF pipeline is also progressing rapidly with data in multiple diseases expected in 2020.Vertex has a Zacks Rank $2 (Buy).
Eli Lilly & Company (LLY - Free Report)
Shares of Lilly are up 6.1% this year so far.
Lilly was one of the few drug companies, which reported strong fourth-quarter results in January, beating estimates for both earnings and sales. The company also slightly raised its 2020 revenue guidance.
In 2020, Lilly’s revenue growth is expected to be driven by higher demand for newer drugs like including Trulicity, Jardiance, Taltz, Verzenio, Basaglar, Emgality as well as newly launched Baqsimi and Reyvow. Lilly is making significant pipeline progress with several positive late-stage data readouts and multiple regulatory updates scheduled for 2020. Lilly is also regularly adding promising new pipeline assets through business development deals. This year, Lilly bought dermatology company Dermira for approximately $1.1 billion. The deal added Dermira’s promising interleukin inhibitor for atopic dermatitis/eczema, lebrikizumab, thereby expanding Lilly’s immunology pipeline.
Lilly carries a Zacks Rank $3 (Hold).
Gilead Sciences (GILD - Free Report)
Shares of Gilead are up 8.9% this year so far. Gilead is another large biotech, which gained due to the coronavirus impact.
It has initiated two phase III studies to evaluate the safety and efficacy of its investigational antiviral candidate, remdesivir in adults diagnosed with COVID-19. These randomized open-label, multicenter studies will enroll approximately 1,000 patients at medical centers, primarily across Asian countries. The studies will assess two dosing durations of the candidate, administered intravenously. Remdesivir has been studied in people with Ebola virus infection.
Meanwhile, the World Health Organization recommended remdesivir as partial remedy for coronavirus though it has yet not been proven that the candidate can treat the disease. Remdesivir is reportedly being used to treat some U.S coronavirus patients on 'compassionate' grounds. It is likely that remdesivir could be available for commercial use in 4-5 months.
Meanwhile, earlier this month, Gilead announced that it will acquire a clinical-stage immuno-oncology company, Forty Seven for approximately $4.9 billion.
Today's Best Stocks from Zacks
Would you like to see the updated picks from our best market-beating strategies? From 2017 through 2019, while the S&P 500 gained and impressive +53.6%, five of our strategies returned +65.8%, +97.1%, +118.0%, +175.7% and even +186.7%.
This outperformance has not just been a recent phenomenon. From 2000 – 2019, while the S&P averaged +6.0% per year, our top strategies averaged up to +54.7% per year.
See their latest picks free >>