In 2020, investing in the biotech sector was focused on companies that were developing therapeutics and/or vaccines to treat Covid-19. This converged with the increase in retail investors who were looking to take under-the-radar (read cheap) stocks to the moon.
This allowed some obscure companies to achieve market-beating growth based on nothing more than the hope that their vaccine candidate could win the vaccine race.
That race is largely over, at least in the United States. The question is one of demand, not supply. And while it’s fair to say that a company like Moderna (NASDAQ:MRNA) will continue to generate significant revenue from its mRNA vaccine throughout 2022, investors should be looking to shift money into other stocks in this sector.
The focus of this article is to show you three biotech stocks that look poised for growth while focusing on areas that are unrelated to Covid-19.
The first biotech stock for you to consider is Amgen (NASDAQ:AMGN). Whereas many of the biotech companies in the Covid-19 vaccine race were small firms, Amgen is the opposite. It’s one of the largest independent biotech companies in the world.
The company already has several drugs and therapeutics in market and it has a robust pipeline that includes drugs that are in Phase 2 or Phase 3 clinical trials. And, it recently received authorization from the U.S. Food & Drug Administration (FDA) for Lumakras, a drug to treat lung cancer. The company estimates that it will have an annual patient pool of approximately 25,000.
In the last 12 months, AMGN stock is down 4.17%. However, in the last five years, AMGN stock has grown by 58.47%. And in 2021, the stock is already up 7.86%. One reason for the strong growth is the company’s high net profit margin that combines with revenue that is growing on a year-over-year basis.
And, AMGN stock holds appeal to value investors as well as it sports a respectable dividend that has grown 39% in the last three years and currently has a 2.88% yield.
The next biotech stock to consider is a side-door play with Illumina (NASDAQ:ILMN). Illumina makes the integrated systems that are required in the analysis of gene variation (I.e. gene sequencing) and biological function. This makes Illumina one of the most significant companies in the healthcare and biotech field.
Illumina cracked the billion-dollar mark for revenue in its most recent quarter. In fact, the company posted revenue and earnings that were higher on a year-over-year basis from 2020. And more importantly, both numbers were higher than the same quarter in 2019.
And looking at Illumina’s performance with a wider lens, the company’s quarterly revenue has risen by approximately 280% over the past 10 years. It shouldn’t be surpising then, that the company’s stock price has grown by 519% in that same time span.
This is the point where it’s important to say that past performance doesn’t guarantee future results. But even if investors see a slowdown in growth, ILMN stock looks like a must-have growth stock in the biotech sector.
Gilead Sciences (GILD)
Some investors may remember Gilead Sciences (NASDAQ:GILD) as a company that had a role to play in the Covid-19 pandemic. It’s therapeutic Remdesivir was one of the first treatments that was shown to have some effect on treating the virus.
But I said this was a forward-looking article. And Gilead has a pipeline that’s full of candidates. And with the money it has from Remdesivir it shouldn’t be diluting shares to bring those drugs to market. The pipeline is also important because the company will have to deal with expiring patents over the next several years.
But with a rock-solid balance sheet, anticipated revenue growth and, like Amgen, those high net profit margins, GILD stock is poised to reward investors who are wiling to hold the stock for the long term.
Before you consider Gilead Sciences, you'll want to hear this.
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