The biotech industry is poised for robust growth due to increasing demand for personalized treatments, rising prevalence of chronic diseases, heightened investments in R&D, and advancements in technology. Due to this fact, investors could consider buying fundamentally strong biotech stocks Innoviva (INVA), ANI Pharmaceuticals (ANIP), and United Therapeutics (UTHR). Read more.
The biotech industry thrives due to consistent innovations and sustained demand for cutting-edge drugs and therapies. The sector is capitalizing on an aging population and the growing demand for effective treatments for each unusual and prevalent illnesses, thereby contributing to its promising prospects.
Due to this fact, it may very well be sensible to consider buying fundamentally strong biotech stocks: Innoviva, Inc. (INVA), ANI Pharmaceuticals, Inc. (ANIP), and United Therapeutics Corporation (UTHR).
Before delving deeper into their fundamentals, let’s discuss why the biotech industry is well-positioned for growth.
Advancements in gene editing, personalized medicine, synthetic biology, and government initiatives shape the biotech industry’s growth. A survey by ICON plc, involving greater than 130 biotech executives, showed that 60% of respondents expected an increase in R&D spending, while only 2% expected a discount in funding.
The growing need for personalized medicine and the creation of additional orphan drug formulations to combat the escalating prevalence of chronic and rare diseases are generating latest avenues for biotechnological applications and fostering the rise of biotech firms.
The sector’s sustained expansion is driven by a rise in clinical trials, expansion of drug pipelines, and increased investments in pharmaceutical R&D. The clinical trial market is forecasted to reach $120.97 billion in 2024. It is anticipated to grow at a CAGR of 4.3% to reach $184.61 billion by 2034.
Notably, biotech firms are leveraging cutting-edge technologies like artificial intelligence (AI) and Big Data analytics to drive innovation and drug development. AI has taken significant strides in identifying drug targets, particularly in anticancer efforts. The worldwide AI for Pharma and Biotech market, valued at $850 million this 12 months, is forecasted to grow at a 30.5% CAGR to reach $4.20 billion by 2027.
Investors’ interest in biotech stocks is clear from the VanEck Biotech ETF’s (BBH) 4.2% returns over the past month. Moreover, the worldwide biotechnology market is projected to reach $3.88 trillion by 2030, expanding at a CAGR of 14% from 2024 to 2030.
Considering these conducive trends, let’s analyze the basic facets of the three Biotech picks, starting with the third selection.
Stock #3: Innoviva, Inc. (INVA)
INVA engages in the event and commercialization of pharmaceutical products in america and internationally. The corporate’s products include RELVAR/BREO ELLIPTA, ANORO ELLIPTA, and TRELEGY ELLIPTA.
On March 4, 2024, INVA entered right into a $35 million secured credit agreement with Armata Pharmaceuticals, Inc. (ARMP). The agreement was geared toward supporting the advancement of clinical trials for ARMP’s phage-based therapeutic candidates targeting antibiotic-resistant infections. This move demonstrated INVA’s continued support for ARMP’s initiatives in combating antibiotic resistance.
When it comes to the trailing-12-month EBITDA margin, INVA’s 56.93% is 914.2% higher than the 5.61% industry average. Likewise, its 45.43% trailing-12-month EBIT margin is significantly higher than the 0.49% industry average. Moreover, its 38.85% trailing-12-month levered FCF margin is substantially higher than the 0.35% industry average.
INVA’s total revenue for the fourth quarter that ended December 31, 2023, rose 30.4% to $85.84 million. The corporate’s net product sales rose 34.9% over the prior-year quarter to $19.68 million.
As well as, its net income attributable to INVA’s stockholders and net income per share got here in at $61.53 million and $0.76, respectively, compared to a net loss and net loss per share of $68.31 million and $0.98, respectively, within the year-ago quarter.
Analysts expect INVA’s EPS for the quarter ending June 30, 2024, to increase considerably year-over-year to $0.22. Its revenue for the quarter ending September 30, 2024, is anticipated to increase 8.7% year-over-year to $73.14 million. Over the past 12 months, INVA’s stock has gained 35.2% to close the last trading session at $14.75.
INVA’s POWR Rankings reflect solid prospects. It has an overall rating of B, which translates to a Buy in our proprietary rating system. The POWR Rankings assess stocks by 118 various factors, each with its own weighting.
It’s ranked #38 out of 362 stocks within the Biotech industry. It has an A grade for Value and a B for Quality. Click here to see INVA’s Growth, Momentum, Stability, and Sentiment rankings.
Stock #2: ANI Pharmaceuticals, Inc. (ANIP)
ANIP is a biopharmaceutical company that develops, manufactures, and markets branded and generic prescription pharmaceuticals in america and Canada. The corporate manufactures oral solid dose products, semi-solids, liquids, and topicals, in addition to controlled substances and potent products.
On January 23, 2024, ANIP announced the launch of Pentoxifylline Prolonged-Release Tablets, USP 400mg, the generic version of Trental. With an annual U.S. market estimated at roughly $19.7 million, ANIP goals to enhance patient access to high-quality therapeutics, emphasizing its commitment to growth and provide reliability within the generics business.
On January 16, 2024, ANIP announced the FDA approval and launch of Indomethacin Oral Suspension, USP, a generic version of Indocin Oral Suspension, with a Competitive Generic Therapy (CGT) designation and 180-day exclusivity, emphasizing expanded access to high-quality generics for limited competition products.
When it comes to the trailing-12-month gross profit margin, ANIP’s 62.71% is 9.5% higher than the 57.29% industry average. Likewise, its 23.17% trailing-12-month levered FCF margin is significantly higher than the 0.35% industry average. Also, its 0.58x trailing-12-month asset turnover ratio is 49.2% higher than the 0.39x industry average.
For the fourth quarter that ended December 31, 2023, ANIP’s net revenues increased 39.7% year-over-year to $131.65 million. Its adjusted EBITDA grew 29.5% from the year-ago value to $30.20 million. Moreover, adjusted net income available to common shareholders and adjusted earnings per share rose 54.3% and 31.6% from the prior 12 months’s period to $19.20 million and $1, respectively.
Street expects ANIP’s revenue for the quarter ending March 31, 2024, to increase 17.9% year-over-year to $125.93 million. Likewise, its EPS for fiscal 2025 is anticipated to increase 12.8% year-over-year to $5.03. It surpassed the Street EPS estimates in each of the trailing 4 quarters. Over the past 12 months, the stock has gained 61.5% to close the last trading session at $66.23.
ANIP’s positive outlook is reflected in its POWR Rankings. It has an overall rating of B, equating to a Buy in our proprietary rating system.
It has an A grade for Growth and Sentiment and a B for Value. It’s ranked #16 in the identical industry. To see ANIP’s rankings for Momentum, Stability, and Quality, click here.
Stock #1: United Therapeutics Corporation (UTHR)
United Therapeutics Corporation is a biotechnology company that engages in the event and commercialization of products to address the unmet medical needs of patients with chronic and life-threatening diseases internationally.
On December 13, 2023, UTHR and Miromatrix Medical Inc. (MIRO) announced the successful completion of the tender offer and merger, with UTHR acquiring all outstanding shares of MIRO, solidifying its position as a completely owned subsidiary and furthering the event of MIRO’s mirokidney product.
When it comes to the trailing-12-month Capex/Sales, UTHR’s 9.90% is 142.2% higher than the 4.09% industry average. Likewise, its 26.09% trailing-12-month levered FCF margin is considerably higher than the 0.35% industry average. Moreover, its 53.24% trailing-12-month EBITDA margin is 848.5% higher than the 5.61% industry average.
UTHR’s total revenues for the fourth quarter, which ended December 31, 2023, increased 25.1% year-over-year to $614.70 million. Its operating income rose 48.1% year-over-year to $260.10 million. The corporate’s net income got here in at $217.10 million, or $4.36 per share, up 64.3% and 63.3% over the prior-year quarter, respectively.
For the quarter ending March 31, 2024, UTHR’s EPS is anticipated to increase 16% year-over-year to $5.64. Its revenue for a similar quarter is anticipated to increase 22.9% year-over-year to $622.92 million. It surpassed the consensus EPS estimates in each of the trailing 4 quarters. Over the past month, the stock has gained 12.9% to close the last trading session at $241.27.
It’s no surprise that UTHR has an overall rating of A, which translates to a Strong Buy in our proprietary rating system.
It has a B grade for Value and Quality. Throughout the Biotech industry, it’s ranked #9. Beyond what we stated above, we even have given UTHR grades for Growth, Momentum, Stability, and Sentiment. Get all UTHR rankings here.
What To Do Next?
43 12 months investment veteran, Steve Reitmeister, has just released his 2024 market outlook together with trading plan and top 11 picks for the 12 months ahead.
UTHR shares were unchanged in premarket trading Thursday. 12 months-to-date, UTHR has gained 9.72%, versus a 8.55% rise within the benchmark S&P 500 index throughout the same period.
In regards to the Creator: Abhishek Bhuyan
Abhishek launched into his skilled journey as a financial journalist due to his keen interest in discerning the basic aspects that influence the long run performance of monetary instruments.
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