The COVID-19 pandemic has highlighted the importance of the Biotech industry. The industry has been able to help the world fight against the deadly virus through vaccines and therapies. Along with contributing to fighting the virus, the industry’s increased focus on finding cures for other currently incurable diseases should help it keep growing. According to a Polaris Market Research report, the global biotechnology market is expected to grow at a 15.5% CAGR from 2021 - 2028.
Investors’ interest in the biotech industry is evident in the SPDR S&P Biotech ETF’s (XBI) 7.7% returns over the past month versus the SPDR S&P 500 Trust ETF’s (SPY) 2.4% gains over this period.
However, biotech stocks are high risk-reward investment propositions in that continuous innovation from investing in R&D is crucial for these companies to prosper. Biogen Inc. (BIIB) and BioNTech SE (BNTX) are innovating consistently and possess strong financials. So, these two stocks have gained more than 50% so far this year and we think still have plenty of upside.
Click here to checkout our Healthcare Sector Report for 2021
Biogen Inc. (BIIB)
BIIB discovers, develops, manufactures, and delivers therapies for treating neurological and neurodegenerative diseases. Its main offerings are TECFIDERA for multiple sclerosis and SPINRAZA for spinal muscular atrophy. The company has collaboration and license agreements with multiple companies, including Acorda Therapeutics, Inc. (ACOR), Eisai, Co., Ltd. (ESALY) and Bristol-Myers Squibb Co. (BMY).
On June 7, BIIB and ESALY announced that the U.S. Food and Drug Administration had granted accelerated approval for ADUHELM as the first and only Alzheimer’s disease treatment to address a defining pathology of the disease by reducing amyloid beta plaques in the brain. This could increase BIIB’s sales in the coming months.
Michel Vounatsos, Biogen’s Chief Executive Officer, said “Our first quarter 2021 results were consistent with our expectations across MS, SMA, and biosimilars despite increased competition.” BIIB’s total liabilities decreased 3.1% year-over-year to $23.85 billion for the first quarter, ended March 31, 2021, while its revenue from SPINRAZA increased 12.8% year-over-year to $371.8 million.
For its fiscal year 2022, analysts expect BIIB’s EPS and revenue to increase 11.9% and 4.9%, respectively, year-over-year to $20.95 and $11.16 billion. It surpassed consensus EPS estimates in three of the trailing four quarters. The stock has gained 65.9% year-to-date to close yesterday’s trading session at $406.14.
BIIB’s POWR Ratings reflects this promising outlook. The company has an overall B rating, which translates to Buy in our proprietary ratings system. The POWR Ratings assess stocks by 118 different factors, each with its own weighting.
The stock has an A grade for Value, and a B grade for Quality. Within the Biotech industry, BIIB is ranked #27 of 487 stocks.
To see the additional POWR Ratings for BIIC (Growth, Sentiment, Momentum and Stability), click here.
BioNTech SE (BNTX)
Headquartered in Mainz, Germany, BNTX is a biotechnology company that develops and commercializes immunotherapies for cancer and other infectious diseases. The company is involved in the development of FixVac product candidates, including BNT111. It also develops neoantigen specific immunotherapies, such as Autogene cevumeran BNT122. The company has collaborations with Sanofi S.A. (SNY); Pfizer Inc. (PFE) and Genmab A/S (GMAB).
BNTX and PFE announced that the Conditional Marketing Authorization for COMIRNATY in the European Union has been expanded to include individuals 12 to 15 years of age. Ugur Sahin, M.D., CEO and Co-founder of BNTX, said “Today’s extension of our COVID-19 vaccine authorization in the European Union is another critical milestone in our collective effort to broaden vaccination programs to as many people as possible.”
BNTX’s total revenue increased 7294.9% year-over-year to €2.05 billion ($2.48 billion) for the first quarter, ended March 31, 2021. Its operating income came in at €1.66 billion ($2.01 billion) compared to a €59.3 million ($71.83 million) operating loss in the prior year period, while its profit for the period was €1.13 billion ($1.37 billion), compared to a €53.4 ($64.68 million) loss in the year-ago period. The company’s EPS came in at €4.39 ($5.32) compared to a €0.24 ($0.29) loss per share in the same quarter of the previous year.
Analysts expect BNTX’s EPS to increase 50,657.1% year-over-year to $35.53 for 2021. The company’s revenue is expected to increase 7,693.6% year-over-year to $3.84 billion for the current quarter, ending June 30, 2021. The stock has gained 170.6% year-to-date to close yesterday’s trading session at $220.58.
BNTX’s POWR Ratings reflect solid prospects. The company has an overall rating of B, which translates to Buy in our proprietary ratings system. It has a B grade for Value and Sentiment.
Click here to see the additional POWR Ratings for BNTX (Growth, Momentum, Stability and Quality). BNTX is ranked #19 in the same industry.
Click here to checkout our Healthcare Sector Report for 2021
BIIB shares were trading at $399.86 per share on Tuesday afternoon, down $6.28 (-1.55%). Year-to-date, BIIB has gained 63.30%, versus a 13.90% rise in the benchmark S&P 500 index during the same period.
About the Author: Nimesh Jaiswal
Nimesh Jaiswal's fervent interest in analyzing and interpreting financial data led him to a career as a financial analyst and journalist. The importance of financial statements in driving a stock’s price is the key approach that he follows while advising investors in his articles.
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