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Biotechnology Stocks

Biotech companies leverage cutting-edge science to create medicines and treatments for a multitude of diseases, making them high-risk, high-reward opportunities for investors looking to profit from healthcare innovation. What is a biotech stock?

CompanyPE RatioMarket CapCurrent PricePrice ChangeVolumeAverage VolumeIndicator(s)
Novartis logo
NVS
Novartis
30.55$219.58 billion$94.40-1.6%100,9272.10 millionEarnings Announcement
News Coverage
Thermo Fisher Scientific logo
TMO
Thermo Fisher Scientific
40.52$201.27 billion$494.38-2.6%35,0921.76 millionUpcoming Earnings
AbbVie logo
ABBV
AbbVie
22.23$192.08 billion$105.17-3.3%366,9627.37 millionUpcoming Earnings
Novo Nordisk A/S logo
NVO
Novo Nordisk A/S
26.67$172.54 billion$70.94-3.2%33,389992,707Upcoming Earnings
Gap Up
Amgen logo
AMGN
Amgen
20.54$150.55 billion$254.65-1.5%48,9872.41 millionUpcoming Earnings
Analyst Revision
General Electric logo
GE
General Electric
30.17$98.90 billion$10.86-3.8%2.14 million83.32 millionEarnings Announcement
Analyst Report
News Coverage
Gilead Sciences logo
GILD
Gilead Sciences
67.42$83.61 billion$65.40-1.9%218,13310.15 million
Vertex Pharmaceuticals logo
VRTX
Vertex Pharmaceuticals
28.67$61.80 billion$227.06-4.5%29,6831.80 millionUpcoming Earnings
Illumina logo
ILMN
Illumina
97.42$61.40 billion$419.87-0.2%17,1921.20 million
MRNA
Moderna
N/A$60.12 billion$157.49+3.7%167,21316.70 millionInsider Selling
Analyst Revision
Lonza Group logo
LZAGY
Lonza Group
49.39$50.39 billion$67.67-1.8%106,14871,428News Coverage
IQVIA logo
IQV
IQVIA
191.79$34.58 billion$174.53-3.2%18,234821,160
BeiGene logo
BGNE
BeiGene
N/A$32.68 billion$336.86-6.0%1,616378,721Gap Up
Seagen logo
SGEN
Seagen
65.62$31.23 billion$166.68-3.5%5,661981,917
GMAB
Genmab A/S
31.50$27.57 billion$40.64-3.4%29,451607,467Analyst Downgrade
Gap Up
SSMXY
Sysmex
95.61$26.34 billion$63.10+0.8%17,88219,890Upcoming Earnings
News Coverage
Gap Down
Genmab A/S logo
GNMSF
Genmab A/S
5.98$25.98 billion$421.08-2.5%5,4281,552High Trading Volume
BNTX
BioNTech
N/A$24.05 billion$105.63-0.6%12,2412.79 millionAnalyst Downgrade
AmerisourceBergen logo
ABC
AmerisourceBergen
N/A$22.23 billion$108.87+0.0%6,9151.59 million
Royalty Pharma logo
RPRX
Royalty Pharma
N/A$20.50 billion$52.30-1.0%16,4753.72 million
Alnylam Pharmaceuticals logo
ALNY
Alnylam Pharmaceuticals
N/A$19.75 billion$160.27-5.7%16,138964,929Analyst Downgrade
Catalent logo
CTLT
Catalent
69.90$18.67 billion$109.75-3.2%9,756998,398Upcoming Earnings
Gap Up
Clarivate logo
CCC
Clarivate
N/A$17.57 billion$28.08-3.2%10,467963,580
TXG
10x Genomics
N/A$17.24 billion$170.62-0.7%6,314914,469
BIO.B
(BIO.B)
4.91$17.11 billion$573.65-2.8%24494High Trading Volume
Gap Up
Bio-Rad Laboratories logo
BIO
Bio-Rad Laboratories
4.76$17.03 billion$556.31-2.5%912240,205
SUZ
Suzano
N/A$16.84 billion$11.88-4.0%8,963533,098Gap Up
PerkinElmer logo
PKI
PerkinElmer
39.06$16.38 billion$143.74-1.7%3,126940,907Upcoming Earnings
BioMarin Pharmaceutical logo
BMRN
BioMarin Pharmaceutical
19.04$15.60 billion$83.20-3.2%7,3591.73 million
IDEX logo
IEX
IDEX
39.01$14.64 billion$190.76-1.4%2,971409,775Upcoming Earnings
argenx logo
ARGX
argenx
N/A$14.25 billion$291.67-3.1%1,689184,880Gap Up
Charles River Laboratories International logo
CRL
Charles River Laboratories International
42.97$13.21 billion$257.80-2.9%1,416317,462Gap Up
PPD
PPD
218.00$12.15 billion$32.70-5.9%5,325731,726Gap Up
ALFVY
Alfa Laval AB (publ)
23.30$11.73 billion$27.97-0.3%18,18213,461Upcoming Earnings
ICON Public logo
ICLR
ICON Public
34.40$11.43 billion$206.37-3.2%1,900205,084
Dr. Reddy's Laboratories logo
RDY
Dr. Reddy's Laboratories
54.59$11.37 billion$66.05-3.7%1,595157,110Upcoming Earnings
iShares Nasdaq Biotechnology ETF logo
IBB
iShares Nasdaq Biotechnology ETF
N/A$11.05 billion$161.97-1.7%82,6572.98 millionNews Coverage
Repligen logo
RGEN
Repligen
232.35$10.63 billion$190.53-5.7%4,992400,468
VIR
Vir Biotechnology
N/A$9.86 billion$103.71+34.0%109,0082.06 millionAnalyst Downgrade
Unusual Options Activity
News Coverage
Gap Up
Bruker logo
BRKR
Bruker
56.17$8.96 billion$57.29-2.2%1,597495,382Analyst Report
Denali Therapeutics logo
DNLI
Denali Therapeutics
N/A$8.75 billion$70.79-3.0%6,053702,150Gap Up
Adaptive Biotechnologies logo
ADPT
Adaptive Biotechnologies
N/A$8.50 billion$59.93-3.6%6,134809,560Insider Selling
Gap Up
PRA Health Sciences logo
PRAH
PRA Health Sciences
36.28$8.22 billion$124.09-3.2%4,435292,434
Alleghany logo
Y
Alleghany
N/A$8.20 billion$579.13-0.2%38961,644
Novavax logo
NVAX
Novavax
N/A$8.10 billion$127.97+0.6%28,4893.15 million
Syneos Health logo
SYNH
Syneos Health
40.69$7.84 billion$74.05-1.8%6,016725,255News Coverage
Fate Therapeutics logo
FATE
Fate Therapeutics
N/A$7.79 billion$87.62-1.9%34,7551.28 millionAnalyst Report
Lumentum logo
LITE
Lumentum
50.20$7.37 billion$99.90+2.4%12,5912.39 millionUpcoming Earnings
United Therapeutics logo
UTHR
United Therapeutics
15.13$7.33 billion$159.92-3.0%2,359381,957Analyst Revision
Gap Up
Galapagos logo
GLPG
Galapagos
N/A$7.28 billion$109.17-1.9%828225,095
Exelixis logo
EXEL
Exelixis
46.15$6.97 billion$22.15-1.4%14,3183.11 million
SWEDISH ORPHAN/S logo
SWTUY
SWEDISH ORPHAN/S
48.76$6.64 billion$24.38-1.2%2001,665News Coverage
Halozyme Therapeutics logo
HALO
Halozyme Therapeutics
300.19$6.58 billion$48.03-1.3%33,3441.26 millionAnalyst Report
Analyst Revision
TG Therapeutics logo
TGTX
TG Therapeutics
N/A$6.58 billion$48.77-2.5%28,0971.65 million
Evotec logo
EVTCY
Evotec
444.47$6.56 billion$80.00+10.7%1,635633High Trading Volume
News Coverage
Gap Down
Iovance Biotherapeutics logo
IOVA
Iovance Biotherapeutics
N/A$6.54 billion$44.05-1.3%69,4501.27 million
SBI logo
SBHGF
SBI
18.84$5.91 billion$25.62-1.1%441916Upcoming Earnings
Gap Up
Emergent BioSolutions logo
EBS
Emergent BioSolutions
34.38$5.80 billion$106.93-2.2%4,983532,457
BEAM
Beam Therapeutics
N/A$5.20 billion$85.47-4.8%27,7401.08 millionGap Down
Amicus Therapeutics logo
FOLD
Amicus Therapeutics
N/A$5.15 billion$19.26-2.6%38,2942.88 millionGap Up
Chart Industries logo
GTLS
Chart Industries
76.57$5.01 billion$134.00-3.6%5,544357,365Gap Up
Medpace logo
MEDP
Medpace
40.14$4.94 billion$131.25-4.9%3,537193,955
IMI logo
IMIAY
IMI
18.28$4.63 billion$34.00flat188753
SEER
Seer
N/A$4.25 billion$68.10-7.2%611268,514Gap Up
LEGN
Legend Biotech
N/A$3.56 billion$27.50-0.3%644368,905Gap Up
BNR
Burning Rock Biotech
N/A$3.10 billion$29.10-4.6%4,107410,203Analyst Downgrade
Fabrinet logo
FN
Fabrinet
25.62$3.07 billion$82.25-1.0%2,817157,894Upcoming Earnings
bluebird bio logo
BLUE
bluebird bio
N/A$3.06 billion$46.28+0.5%38,6391.25 million
IGMS
IGM Biosciences
N/A$2.97 billion$97.26+0.5%1,816180,411
Rocket Pharmaceuticals logo
RCKT
Rocket Pharmaceuticals
N/A$2.96 billion$54.12+1.0%5,477485,494News Coverage
Gap Up
PHR
Phreesia
N/A$2.94 billion$66.05-0.9%11,623501,225Insider Selling
FSKR
FS KKR Capital Corp. II
N/A$2.90 billion$17.00-0.2%33526,362News Coverage
Xencor logo
XNCR
Xencor
N/A$2.80 billion$46.68-4.0%7,337244,058Gap Up
CytoDyn logo
CYDY
CytoDyn
N/A$2.79 billion$4.66-3.1%4.02 million3.34 million
Amyris logo
AMRS
Amyris
N/A$2.40 billion$9.74-3.1%68,4276.30 million
ADCT
ADC Therapeutics
N/A$2.33 billion$34.00+0.5%844200,079Analyst Downgrade
Zymeworks logo
ZYME
Zymeworks
N/A$2.12 billion$46.21-0.1%7,545530,410Analyst Downgrade
News Coverage
Gap Up
Quanterix logo
QTRX
Quanterix
N/A$2.10 billion$65.79-1.0%8,387466,049Analyst Report
Insider Selling
Gap Up
Bavarian Nordic A/S logo
BVNRY
Bavarian Nordic A/S
17.03$2.06 billion$11.75flat20333
Sangamo Therapeutics logo
SGMO
Sangamo Therapeutics
N/A$2.04 billion$14.77+2.6%33,4181.50 millionGap Down
STTK
Shattuck Labs
N/A$1.98 billion$45.31-4.6%904150,303Gap Up
Inovio Pharmaceuticals logo
INO
Inovio Pharmaceuticals
N/A$1.98 billion$11.44+8.1%355,15611.57 million
Myriad Genetics logo
MYGN
Myriad Genetics
N/A$1.97 billion$26.51+1.1%12,158967,691
VIE
Viela Bio
N/A$1.96 billion$35.71-2.6%194,971145,679News Coverage
BNGO
Bionano Genomics
N/A$1.87 billion$11.53-5.6%804,055163.67 millionGap Up
Revance Therapeutics logo
RVNC
Revance Therapeutics
N/A$1.85 billion$26.99-2.8%7,962399,633Gap Up
Replimune Group logo
REPL
Replimune Group
N/A$1.81 billion$39.41-12.5%785,442382,199Insider Selling
High Trading Volume
News Coverage
Hercules Capital logo
HTGC
Hercules Capital
14.26$1.75 billion$15.40+0.7%2,787634,780
BioCryst Pharmaceuticals logo
BCRX
BioCryst Pharmaceuticals
N/A$1.62 billion$9.08-0.9%73,1414.92 millionGap Up
Heron Therapeutics logo
HRTX
Heron Therapeutics
N/A$1.60 billion$17.56-3.9%1.07 million1.04 millionAnalyst Revision
REGENXBIO logo
RGNX
REGENXBIO
N/A$1.58 billion$42.28-0.1%12,386742,575Gap Up
Simulations Plus logo
SLP
Simulations Plus
154.73$1.57 billion$78.91+0.5%2,391262,857Insider Selling
ImmunoGen logo
IMGN
ImmunoGen
N/A$1.49 billion$7.65-1.0%2.60 million2.43 million
Zealand Pharma A/S logo
ZEAL
Zealand Pharma A/S
N/A$1.46 billion$35.57-3.3%129,681High Trading Volume
News Coverage
GRCL
Gracell Biotechnologies
N/A$1.41 billion$21.00-2.3%501352,906
Krystal Biotech logo
KRYS
Krystal Biotech
N/A$1.40 billion$67.00-5.9%3,143120,513Gap Up
Huron Consulting Group logo
HURN
Huron Consulting Group
N/A$1.34 billion$57.04-3.0%1,75898,483
INBX
Inhibrx
N/A$1.28 billion$32.89-3.4%2,75193,931
Cellectis logo
CLLS
Cellectis
N/A$1.28 billion$29.20-3.0%9,146409,554Gap Up
PCVX
Vaxcyte
N/A$1.26 billion$24.27-1.8%2,678282,034Gap Up
CSV / Excel Export To export this table to CSV or Excel, upgrade to MarketBeat All Access.
The How and Why of Investing in Biotech Stocks

One of the most fascinating and potentially risky sectors to invest in is the biotech sector. This is the sector that includes companies involved in the research and development of therapeutics and vaccines to relieve a myriad of conditions and diseases.

The Covid-19 pandemic brought on by the novel coronavirus in 2020 put the sector squarely in focus. However, due to the unprecedented assistance from the U.S. government through Operation Warp Speed (OWS) it was also an anomaly.

Seasoned investors in the biotech industry understand that products go through a lengthy, rigorous, and expensive testing process. However even when (and if) a drug makes it through that process, the product(s) still have to be approved by the U.S. Food & Drug Administration (FDA) before it can go to market.

And the harsh reality of the biotech sector is that many products will never make it to market, which adds a level of risk to any biotech investment. The good news is there are ways to help minimize the risk by understanding what qualities to look for in biotech stocks.

Introduction

The biotech sector illustrates the risk-reward of investing in stocks more than almost any other sector. Biotech companies are involved in developing therapeutics and drugs for life-threatening conditions. Many of the companies in this sector are small-cap companies. Some are even penny stocks (meaning they have a stock price of under $5).

Biotech stocks are popular because, if these companies successfully bring a product to market, their stock price could double or more virtually overnight. On the other hand, perhaps no other sector comes with so much risk. The reality is that many of the products that these companies develop never make it out of clinical trials, or get approved by the FDA. And that means that investors can easily lose the majority of their investment.

In this article, we’ll describe what a biotech company is and how it is different from (and in some cases similar to) a pharmaceutical company. We’ll also share a few practical tips that can help you select a biotech stock.

How a Biotech Company Is Different From a Pharmaceutical Company?

The biotech and pharmaceutical sectors are related but more like cousins than siblings. One key point that distinguishes the two sectors is that investing in pharmaceutical companies are about what is and biotech stocks are about what could be. And that changes the risk profile for both.

A pharmaceutical company has revenue coming in from products that are commercially available and have other products in development. Because of this pharmaceutical companies are generally profitable and in some cases offer investors a dividend, which can be a significant part of an investor’s total return.

By contrast, a biotech company is primarily research-driven that are using science to develop a potential therapy or vaccine. Many of these companies are small-cap stocks that are not profitable. And even the small fraction of those that rarely pay a dividend.

Another distinction is that pharmaceutical companies spend a great deal of money in marketing and sales. On the other hand, biotech companies see their strength as being in research and development (R&D).

Where the two sectors overlap is that pharmaceutical companies are increasingly pulling back from research and are looking to partner with biotech firms for innovation. This helps create an opportunity for investors who know what to look for in a biotech stock.

How to Select a Biotech Stock

There’s no sure-fire way to take the risk out of biotech stocks. However, there are certain things you can look for to help manage your risk.

  1. Look for a “hot” area of biotech. This means looking for a company that is doing research for a disease or condition that affects a large segment of the population. However, as an investor, these are the companies that you should be looking for because there will be a high demand for the company’s products. The obvious reason is that the companies that were successful would be able to get a faster return on their significant R&D and licensing efforts.

    For example, during the Covid-19 pandemic companies that were developing vaccine candidates soared. However, investors can also look for biotech firms that are researching treatments for areas such as cancer, AIDS, heart disease and neurological conditions.

    Another reason to look for a hot area of research is that it can lead to breakthrough “orphan” drugs and treatments that – if they are first to market - are typically protected from competition for many years.

  2. Look at the company they keep. Many biotech companies are small-cap companies. This can help them maintain a singular focus. However biotech development is expensive and when smaller companies form collaborations with other companies, it can help provide financial and logistical support. And if one collaborator is good, more is better.

  3. As with many investment opportunities, cash is king. The record pace at which multiple Covid-19 vaccines were developed underscores the length of time it takes to bring a product to market. And that means that you should be looking for companies that have an ample cash reserve. It’s not uncommon for small-cap biotech firms to raise money through secondary share offerings. This can work. However, it comes at the expense of share dilution. Companies that continually need to issue share offerings should raise a caution flag for investors.

  4. It stands to reason that in addition to finding companies that have an ample supply of cash, you also want to find companies that are not overly extended with debt. Companies that are heavily burdened with debt will often need to raise more capital which can lead to an unsustainable spiral.

  5. Look for companies with a deep pipeline of products that are in clinical trials. Many biotech companies have one product candidate. However, that’s a high-risk, high-reward proposition for investors. If that product fails, a company might have no other way to recoup their R&D costs. But companies that have several products in development give themselves multiple bites at the apple.

  6. Just as investors want to look for a deep pipeline, they also want to see market-ready products. A deep pipeline is one thing, but at some point, a company has to be able to bring a product to market. Completing clinical trials on human patients is a good first start. However, that’s only the first step. The product needs approval by the U.S. Food & Drug Administration (FDA). And that can take some time. Nevertheless, getting a drug successfully through clinical trials is a good indicator that a product will come to market sooner rather than later.

  7. Look for biotech stocks that have the potential to rebound quickly. These are typically companies whose stocks are being sold on temporary bad news. The process of getting a drug to market is notoriously complex. Along the line, many speculative investors will trade on the news. However investors can use a temporary drop in share price as a great opportunity to buy on the dip. Of course, you have to believe that the news is actually much ado about nothing. If so, investors can use these opportunities to accumulate additional shares.

  8. Have trust for who is in charge. It’s important that the management team consists of not only business-savvy entrepreneurs but also individuals who have the necessary scientific or medical credentials. This ensures that the company will not only be able to allocate resources towards the most promising products, they will also be able to properly interpret research data and make corrections as necessary.

How to invest in biotech stocks?

The easiest and more popular way to invest in biotech stocks is to buy stocks of individual companies. However, investing in an exchange-traded funds (ETFs) can be a smart way to manage the inherent risk of this sector. There are several biotech ETFs that track an index (a basket) of biotech stocks. Some of the most popular biotech ETFs are:

  • S&P Biotech Select Industry Index (INDEXSP:SPSIBI)
  • NYSE Arca Biotechnology Index (INDEXNYSEGIS:BTK)
  • NASDAQ Biotechnology Index (INDEXNASDAQ:NBI)
  • iShares NASDAQ Biotechnology ETF (NASDAQ:IBB)

The final word on investing in biotech stocks

Investing in biotech stocks can be one of the most profitable sectors for risk-tolerant investors. Biotech companies are engaged in research and development for life-threatening conditions. If these companies are able to successfully bring a product to market, its stock price (which in some cases is trading as a penny stock) can double, triple or move even higher.

However, there’s also a tremendous risk to biotech stocks. The process to get a product approved is lengthy and expensive. And just getting a product through clinical trials is not sufficient. There is still an approval process through the FDA. And, unlike the speed at which Covid-19 vaccines have been approved, this can also be a lengthy process.

To invest in biotech stocks requires knowledge of not only financial fundamentals but also the science and medicine behind the company. Individual investors who have a background in science and medicine may have the ability to separate the contenders from the pretenders.

                     



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