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3 Big Biotechs Poised for Growth Amid Coronavirus Pandemic
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The coronavirus outbreak has been shining the spotlight on the biotech sector since the onset of 2020. Though the global economy grapples with a slowdown, the biotech sector has had a decent run in the year so far, with the Nasdaq Biotechnology (^NBI) rising 8.8% year to date on hopes of a possible coronavirus treatment.
In general, the biotech sector has always been riskier than the more stable large-cap pharmaceuticals industry or the overall medical sector as investors are mostly banking on the product pipelines of a very few companies having approved drugs in their portfolio.
The year so far has been all about coronavirus treatments as the pandemic deepens, resulting in more and more fatalities with each passing day. Desperate times call for desperate measures and the pharma/biotech companies are currently evaluating every possible weapon in their arsenal to contain and fight this outbreak. Most companies have seen a surge in their share prices following any update in this regard. While some are developing vaccines to prevent the spread, others are working to develop antibodies to cure the infected. Meanwhile, innovative therapies, like stem cell therapy, are also being evaluated to treat the infection.
Given the severity of the spread, the Trump administration has come up with the idea of Operation Warp Speed ("OWS"), a national program to accelerate the development, manufacturing and distribution of COVID-19 vaccines, therapeutics and diagnostics.
While pharma bigwigs like J&J, AstraZeneca and Pfizer, among others, are leading the race to develop a vaccine, smaller biotech companies like Moderna (MRNA - Free Report) are also in the forefront, progressing with its mRNA vaccine candidate against COVID-19. Moderna recently finalized the phase III study protocol based on feedback from the FDA and expects dosing to begin in July. Novavax, Inc. is another biotech company, which is progressing well with its vaccine candidate for COVID-19. Biotech bigwig Regeneron (REGN - Free Report) has initiated the first study on its experimental dual antibody cocktail, REGN-COV2, for the prevention and treatment of COVID-19.
Meanwhile, the outbreak has resulted in a delay in key FDA decisions and the postponement of important studies. While most companies reported decent first-quarter results as forward purchasing impacted performance, the second-quarter results are most likely going to be tepid due to the global lockdown in April.
Nevertheless, keeping in mind the above-mentioned positive factors, we expect the sector to gather steam as the year progresses. In such a scenario, adding stocks from this sector will likely aid portfolio returns. Moreover, the Zacks Biomedical and Genetics industry is placed within the top 15% of the 256 Zacks-ranked industries. Here we zero in on the three big biotech companies, which hold enough room for improvement, backed by a broad and strong product portfolio. Moreover, investing in biotech biggies provides a cushion against volatility in the sector.
Medical - Biomedical and Genetics Industry 5YR % Return
Vertex Pharmaceuticals’ (VRTX - Free Report) key area of focus is cystic fibrosis (CF) and it has a market-leading portfolio of the same. Trikafta’s early approval and launch was a significant milestone for the company. Rapid uptake of the drug has boosted the company’s performance. Trikafta is crucial for Vertex’s long-term growth as it has the potential to treat up to 90% of CF patients. The company is also developing drugs in other specialty disease areas like pain, alpha-1 antitrypsin deficiency (AAT), sickle cell disease, beta-thalassemia and APOL1-mediated kidney diseases.
Gilead Sciences, Inc. (GILD - Free Report) primarily focuses on developing drugs for the treatment of HIV, liver, hematology/oncology and inflammation/respiratory diseases. It is looking to diversify its business as the HCV business has lost sheen. The HIV business maintains momentum for the company, driven by Biktarvy. The company is also bolstering the oncology pipeline with collaborations. Importantly, the company has been in the news from the onset of the year owing to its promising experimental coronavirus treatment, remdesivir. It recently reported mixed results from a late-stage study on investigational antiviral, remdesivir, in hospitalized patients with moderate COVID-19 pneumonia. The FDA has also granted remdesivir an Emergency Use Authorization for the treatment of hospitalized patients with severe COVID-19, given the severity of the pandemic. The drug is currently approved in Japan as a treatment for patients infected with COVID-19. A potential approval of remdesivir will be a significant boost for the company.
Gilead currently carries a Zacks Rank #2 (Buy).
Biogen (BIIB - Free Report) holds a strong position in the multiple sclerosis (MS) market with a wide range of products, including Avonex, Tysabri, Tecfidera and Plegridy. The company is working on consolidating its position in the MS market by bringing new treatments. The company is looking to strengthen its Alzheimer’s disease (AD) and other neurodegenerative disorders pipeline. Spinal muscular atrophy (SMA) treatment, Spinraza (nusinersen), continues to dominate the market. It is also working with Samsung BioLogics to bring new biosimilars to the market.
Biogen currently carries a Zacks Rank 2.
Just Released: Zacks’ 7 Best Stocks for Today
Experts extracted 7 stocks from the list of 220 Zacks Rank #1 Strong Buys that has beaten the market more than 2X over with a stunning average gain of +24.1% per year.
These 7 were selected because of their superior potential for immediate breakout.
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3 Big Biotechs Poised for Growth Amid Coronavirus Pandemic
The coronavirus outbreak has been shining the spotlight on the biotech sector since the onset of 2020. Though the global economy grapples with a slowdown, the biotech sector has had a decent run in the year so far, with the Nasdaq Biotechnology (^NBI) rising 8.8% year to date on hopes of a possible coronavirus treatment.
In general, the biotech sector has always been riskier than the more stable large-cap pharmaceuticals industry or the overall medical sector as investors are mostly banking on the product pipelines of a very few companies having approved drugs in their portfolio.
The year so far has been all about coronavirus treatments as the pandemic deepens, resulting in more and more fatalities with each passing day. Desperate times call for desperate measures and the pharma/biotech companies are currently evaluating every possible weapon in their arsenal to contain and fight this outbreak. Most companies have seen a surge in their share prices following any update in this regard. While some are developing vaccines to prevent the spread, others are working to develop antibodies to cure the infected. Meanwhile, innovative therapies, like stem cell therapy, are also being evaluated to treat the infection.
Given the severity of the spread, the Trump administration has come up with the idea of Operation Warp Speed ("OWS"), a national program to accelerate the development, manufacturing and distribution of COVID-19 vaccines, therapeutics and diagnostics.
While pharma bigwigs like J&J, AstraZeneca and Pfizer, among others, are leading the race to develop a vaccine, smaller biotech companies like Moderna (MRNA - Free Report) are also in the forefront, progressing with its mRNA vaccine candidate against COVID-19. Moderna recently finalized the phase III study protocol based on feedback from the FDA and expects dosing to begin in July. Novavax, Inc. is another biotech company, which is progressing well with its vaccine candidate for COVID-19. Biotech bigwig Regeneron (REGN - Free Report) has initiated the first study on its experimental dual antibody cocktail, REGN-COV2, for the prevention and treatment of COVID-19.
Meanwhile, the outbreak has resulted in a delay in key FDA decisions and the postponement of important studies. While most companies reported decent first-quarter results as forward purchasing impacted performance, the second-quarter results are most likely going to be tepid due to the global lockdown in April.
Nevertheless, keeping in mind the above-mentioned positive factors, we expect the sector to gather steam as the year progresses. In such a scenario, adding stocks from this sector will likely aid portfolio returns. Moreover, the Zacks Biomedical and Genetics industry is placed within the top 15% of the 256 Zacks-ranked industries. Here we zero in on the three big biotech companies, which hold enough room for improvement, backed by a broad and strong product portfolio. Moreover, investing in biotech biggies provides a cushion against volatility in the sector.
Medical - Biomedical and Genetics Industry 5YR % Return
Medical - Biomedical and Genetics Industry 5YR % Return
3 Stocks to Buy
Vertex Pharmaceuticals’ (VRTX - Free Report) key area of focus is cystic fibrosis (CF) and it has a market-leading portfolio of the same. Trikafta’s early approval and launch was a significant milestone for the company. Rapid uptake of the drug has boosted the company’s performance. Trikafta is crucial for Vertex’s long-term growth as it has the potential to treat up to 90% of CF patients. The company is also developing drugs in other specialty disease areas like pain, alpha-1 antitrypsin deficiency (AAT), sickle cell disease, beta-thalassemia and APOL1-mediated kidney diseases.
Vertex currently carries a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Gilead Sciences, Inc. (GILD - Free Report) primarily focuses on developing drugs for the treatment of HIV, liver, hematology/oncology and inflammation/respiratory diseases. It is looking to diversify its business as the HCV business has lost sheen. The HIV business maintains momentum for the company, driven by Biktarvy. The company is also bolstering the oncology pipeline with collaborations. Importantly, the company has been in the news from the onset of the year owing to its promising experimental coronavirus treatment, remdesivir. It recently reported mixed results from a late-stage study on investigational antiviral, remdesivir, in hospitalized patients with moderate COVID-19 pneumonia. The FDA has also granted remdesivir an Emergency Use Authorization for the treatment of hospitalized patients with severe COVID-19, given the severity of the pandemic. The drug is currently approved in Japan as a treatment for patients infected with COVID-19. A potential approval of remdesivir will be a significant boost for the company.
Gilead currently carries a Zacks Rank #2 (Buy).
Biogen (BIIB - Free Report) holds a strong position in the multiple sclerosis (MS) market with a wide range of products, including Avonex, Tysabri, Tecfidera and Plegridy. The company is working on consolidating its position in the MS market by bringing new treatments. The company is looking to strengthen its Alzheimer’s disease (AD) and other neurodegenerative disorders pipeline. Spinal muscular atrophy (SMA) treatment, Spinraza (nusinersen), continues to dominate the market. It is also working with Samsung BioLogics to bring new biosimilars to the market.
Biogen currently carries a Zacks Rank 2.
Just Released: Zacks’ 7 Best Stocks for Today
Experts extracted 7 stocks from the list of 220 Zacks Rank #1 Strong Buys that has beaten the market more than 2X over with a stunning average gain of +24.1% per year.
These 7 were selected because of their superior potential for immediate breakout.
See these time-sensitive tickers now >>