Why the surge of interest in biotech stocks? The explanation boils down to empirical data and a potential shift in market dynamics.
To begin with, the numbers paint a rosy picture for biotech stocks. Grand View Research reports that the global biotech industry amassed a hefty $1.55 trillion valuation last year. Looking ahead, industry experts foresee a robust compound annual growth rate (CAGR) of 13.96% between 2024 and 2030, potentially reaching a staggering $3.88 trillion.
Secondly, signs of a sector rotation are emerging. While artificial intelligence had been all the rage, recent weeks have witnessed a possible deceleration in momentum among various AI-focused companies. This has led traders to cast their nets in search of fresh prospects.
And what better prospects than those aimed at advancing human welfare? Here are some biotech stocks that warrant consideration:
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Operating out of Minneapolis, Minnesota, Bio-Techne (NASDAQ:TECH) is in the business of developing, manufacturing, and vending life science reagents, instruments, and services catering to the research, diagnostic, and bioprocessing sectors. Although not a pure-play biotech company, Bio-Techne plays a pivotal role in the broader biotech ecosystem. Year to date, TECH has witnessed a modest 5% decline.
The company has grappled with lackluster financial results of late. In the third quarter of the previous year, Bio-Techne reported an earnings per share of 41 cents, falling short of the 43-cent target. For Q4, the EPS stood at 40 cents, below the 41-cent projection. Analysts are forecasting sales to marginally touch $1.15 billion in the ongoing fiscal year, representing a mere 1% uptick from 2023.
Nevertheless, revenue is anticipated to surge to $1.25 billion in 2025, reflecting an impressive growth rate of nearly 9% year-on-year. Should the expected sectoral shift materialize ahead of schedule, TECH could find itself on an upward trajectory sooner rather than later.
The consensus among analysts paints a favorable outlook for TECH stock, rating it a strong buy with a target price of $81.50.
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Situated in the U.K., Centessa Pharmaceuticals (NASDAQ:CNTA) is in the business of unearthing, developing, and delivering medications to patients. The company’s focus lies on an activated protein C inhibitor for tackling hemophilia A and B and on an oral drug for treating narcolepsy type 1 (NT1). Since the year commenced, CNTA has seen its value soar by close to 34%.
Centessa’s allure to investors stems from its upward momentum. Over the past 52-week period, the company’s shares have witnessed a substantial 169% uptick in equity valuation. Essentially, Centessa is striving to rebound from a lackluster public market entry back in 2021.
Notably, Centessa has been successful in limiting the magnitude of anticipated per-share losses. In Q2, the company reported a loss of 26 cents per share, surpassing the forecasted 49-cent deficit. Likewise, in Q3, the company disclosed a loss per share of 40 cents, exceeding the predicted 52-cent shortfall. The company is due to unveil its Q4 results on March 28.
Analysts unanimously back CNTA as a strong buy with a target price of $13.33. Once more, it emerges as a compelling option among biotech stocks for a momentum trade.
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Situated in West Conshohocken, Pennsylvania, Madrigal Pharmaceuticals (NASDAQ:MDGL) is a biopharmaceutical company in the clinical-stage.
The Biotech Buzz: NASH Therapeutics Industry Overview
MDGL: Therapeutic Trailblazer in the NASH Domain
Excitement is palpable within the biotech arena as MDGL leads the charge in revolutionizing Non-Alcoholic Steatohepatitis (NASH) treatment with its cutting-edge drug, resmetirom. Already in Phase 3 clinical trials, shares of MDGL surged 19% since the year’s initiation, hinting at an imminent growth spurt. Market analysts set their sights on a $97.04 million sales milestone for the current fiscal year, but the ambitious projection for 2025 shoots for $348.93 million – signifying a whopping 260% year-over-year growth. Notably, covering experts unanimously rate MDGL as a strong buy, with a target price of $369.25.
CYTK: A Bumpy Ride for the Muscle Mastery Maven
Cytokinetics (NASDAQ:CYTK) stands at a crucial juncture within the biopharma landscape, endeavoring to craft novel treatments by manipulating muscle function. While headquartered in South San Francisco, CYTK’s stock has weathered a storm, witnessing a 23% decline since the year’s genesis. Earnings disappointments have been a recurring theme, such as the unsettling Q4 where reported losses exceeded expectations. Despite this, hope lingers as 2025 revenue estimates hover at $145.29 million, dwarfing the meager $7.53 million from 2023. Forecasters predict a stock value of $94.63 in the upcoming year, making CYTK an intriguing prospect among biotech contenders.
CPRX: Catalyst Pharmaceuticals’ Braving Market Turbulence
Catalyst Pharmaceuticals (NASDAQ:CPRX), an entity dedicated to alleviating rare neuromuscular ailments, has encountered a rough patch in 2022, marked by a 23% stock descent. Earnings inconsistency has plagued the company, with several quarters registering undesirable shortfalls. However, glimmers of hope emerged in Q4 with an earnings per share that outshone predictions. Looking ahead, analysts foresee a potential sales boom, estimating $463.9 million for the current fiscal year and $561.32 million by 2025, signaling a 21% annual growth. CPRX garners unanimous acclaim as a strong buy, boasting an average price target of $25.51.
IOVA: Illuminating Paths in Biotherapeutics
The Booming Biotech Landscape: IOVA and SLN Making Waves
IOVA Ascending the Biotech Ranks
Embarking on its journey in 2007, Iovance Biotherapeutics (NASDAQ:IOVA) has carved a niche for itself in developing and commercializing cutting-edge cell therapies utilizing autologous tumor-infiltrating lymphocytes. The primary objective? Tackling metastatic melanoma and various solid tumor cancers head-on through innovative solutions.
IOVA has emerged as a standout performer in the biotech stock arena, escalating its worth by a staggering 72% since the inception of the year. Over the last 52 weeks, the shares witnessed a remarkable doubling in value, painting a picture of steadfast growth.
Unfolding an intriguing narrative, Iovance’s financial report card showcases an average positive earnings surprise of close to 37% during the initial half of 2023. However, the latter half depicted a miss on the bottom-line targets.
Industry experts offer a promising outlook for 2024, predicting Iovance to amass a revenue of $162.27 million. Looking ahead to 2025, this figure is anticipated to soar to an impressive $418.63 million—a remarkable leap from the previous year’s modest sales figure of $1.19 million.
Moreover, IOVA enjoys a unanimous tag of a strong buy, with analysts setting the average price target at $26.09, making it a riveting prospect for investors delving into the biotech domain.
Silence Therapeutics in the Biotech Arena
Established in 1994 and headquartered in the United Kingdom, Silence Therapeutics (NASDAQ:SLN) stands out as a purveyor of innovative ribonucleic acid (RNA) therapeutics, with a primary focus on hematology, cardiovascular diseases, and other rare metabolic conditions. Operating at the forefront of science, Silence is renowned for its mRNAi GOLD GalNAc Oligonucleotide Discovery platform, honing in on disease-associated genes in the liver.
The company’s specialized RNA molecules work in tandem with the body’s intrinsic RNA interference mechanism, targeting and degrading mRNA molecules that encode specific proteins linked to disease. Noteworthy is Silence’s ongoing development of SLN360, currently undergoing Phase 2 trials to address the reduction of elevated lipoprotein levels.
While profitability remains an elusive feat for Silence Therapeutics, the trajectory of revenue growth over the last three years has been nothing short of impressive, boasting a solid 47.5% rise.
In a resounding chorus of confidence, analysts unanimously bestow the strong buy label upon SLN, projecting an average price target of $57.25. This forecast signifies a potential growth of nearly 151%, with the high-end estimate positing a target price of $75.
