Biotech stocks have been on a roller-coaster ride, but continue to outperform the broader market.
In 2020, the industry was thrust into the pandemic limelight as Pfizer (PFE) and its partner BioNTech (BNTX), along with Moderna (MRNA) and Johnson & Johnson (JNJ), launched a trio of Covid vaccines. But as society learned to live with Covid — and other concerns around the economy, inflation and politics took center stage — interest in biotech fell by the wayside.
Shares of Investor’s Business Daily’s biotech industry group hit a downward slope from February 2021 to June 2022. Though things began to look up, initially, biotech stocks have mostly traded sideways since last fall. Today, the entire group has a Relative Strength Rating of 91, which puts them in the top 9% of all stocks in terms of 12-month performance, according to IBD Digital.
The group is ranked No. 17 out of 197 industry groups. Meanwhile, the pharma group ranks No. 113.
But it’s key to watch specific measures when examining stocks. In terms of fundamental and technical measures as well as 12-month performance, the best biotech stocks today are:
- Catalyst Pharmaceuticals (CPRX)
- Genmab (GMAB)
- Biomarin Pharmaceutical (BMRN)
- Harmony Biosciences (HRMY)
- Immunocore (IMCR)
The No. 1 Biotech Stock
Catalyst is the No. 1 biotech stock, leading an industry group of more than 800 companies.
Catalyst recently added a second product to its lineup. Through a deal with Eisai (ESALY), Catalyst can now sell anti-seizure medicine Fycompa in the U.S. Catalyst also sells Firdapse, a treatment for Lambert-Eaton myasthenic syndrome, or LEMS. LEMS is a rare autoimmune condition that saps muscle strength and often occurs in lung cancer patients.
Sales are growing, but Teva Pharmaceutical (TEVA) recently said it plans to launch a generic version of Firdapse. Teva says the patents covering Firdapse are invalid and not enforceable. Catalyst now has almost two months to respond to Teva’s filing.
Shares of Catalyst tumbled below their 50-day moving average on the Teva news, MarketSmith.com shows.
Catalyst stock remains on the Tech Leaders list.
Bullishly, CPRX shares have a best-possible Composite Rating of 99, according to IBD Digital. This puts the biotech stock in the top 1% of all stocks in terms of fundamental and technical measures. Its 12-month performance, measured by the Relative Strength Rating, is also in the top 3% of all stocks.
Cancer Treatments Are Key
Genmab sells a small handful of treatments for cancer. The company partners with big biopharma names, including AbbVie (ABBV), Horizon Therapeutics (HZNP), Seagen (SGEN) and J&J.
The company recently pre-announced $7.98 billion in worldwide sales of Darzalex, a cancer treatment in partnership with J&J’s Janssen division. Genmab receives royalties on global net sales of the drug. The company is slated to report its fourth-quarter earnings later this month.
Now, Genmab on expanding its suite of medicines to new solid tumors and blood cancers.
The biotech stock has a Composite Rating of 99 with a lower RS Rating of 81. Genmab is also a Tech Leader.
Biomarin Nearing FDA Review In Hemophilia
Biomarin is focusing on hereditary conditions.
The company recently said 134 patients treated with its gene therapy for hemophilia A had stable and durable results over three years. On average, patients had an 80% reduction in annualized bleed rates. On average, patients reduced their use of traditional hemophilia treatment by 94%.
The Food and Drug Administration has said it doesn’t plan to hold an advisory committee meeting to discuss the treatment. The drug is known as Roctavian in Europe where it’s already approved. Approval in the U.S. could be a boon for the biotech stock.
Investors are closely watching the space after Uniqure (QURE) and Australia’s CSL gained FDA approval for a hemophilia B gene therapy.
Today, Biomarin shares are trading just below a profit-taking zone above a double-bottom base with an entry at 92.86.
Bullishly Biomarin stock has a strong Composite Rating of 98 and an RS Rating of 94. It also lands on the Tech Leaders list.
Harmony’s Pipeline In A Product
Biotech stock Harmony Biosciences is making a name for itself with a single product: pitolisant. The company sees the drug “as a portfolio in a product opportunity.”
Today, pitolisant is approved as a narcolepsy treatment named Wakix. But Harmony is also investigating pitolisant in other conditions, including a sleeping disorder called idiopathic hypersomnia, a genetic disorder known as Prader-Willi syndrome and a myotonic dystrophy, a muscle weakness disease.
Harmony is also testing an earlier-stage product in Prader-Willi syndrome. Prader-Willi causes a number of behavioral and intellectual problems. It can also lead to short stature.
But the biotech stock is below its 50-day line. The biotech stock has a strong Composite Rating of 98 and an RS Rating of 72 after its chief executive left to take over at Novavax (NVAX).
Harmony also ranks in the Tech Leaders list.
Immunocore, A T-Cell Specialist
Immunocore is making a name for itself in cancer treatment. The company sells a drug called Kimmtrak for patients with a specific form of melanoma. But it’s also working on a number of other treatments that use the same T-cell receptor-based therapy.
Today, Immunocore stock has a strong Composite Rating of 95 and an RS Rating of 98, putting it among the cream of the crop for all stocks.
Shares are forming a cup-with-handle base and a buy point at 65.10. They also recently surged above their 50-day moving average and have long remained about their 200-day line.
Bullishly, the biotech stock is also a Tech Leader.
Follow Allison Gatlin on Twitter at @IBD_AGatlin.
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