Biotechnology is one of the sectors that has been in the limelight since the onset of the COVID-19 crisis. The entire world was focused on biotech stocks for effective and agile diagnostic tests in the beginning, and now they are at the center of discussion for an effective vaccine or a treatment for COVID-19.
The recent bull run is the result of the pandemic to a large extent. However, many biotech companies have a promising future due to the plethora of treatments and medical advancements they are continuously making.
The robust pipeline of drugs that these companies are discovering for chronic as well as fatal diseases are exemplary. Whether it is oncology, renal diseases, pulmonary conditions, cardiovascular treatment, or rare diseases, biotech companies have made immense progress in each sphere. With the sudden pandemic in place, many countries are taking proactive steps to improve public health facilities. Thus, the biotech companies will also have a key role to play in this by designing effective therapies and cures.
Most of the biotech companies have also posted upbeat results and a splendid surge in revenues, making it evident that it is a high growth sector.
So, this is an opportune time for the investors to have some exposure to biotech stocks that possess high growth prospects. Three such companies are Moderna, Inc. (MRNA), BioNTech SE (BNTX), and Acceleron Pharma Inc. (XLRN).
Moderna, Inc. (MRNA)
MRNA uses messenger RNA to develop therapeutics and vaccines for treating infectious and cardiovascular diseases, immuno-oncology, and other rare diseases. The biotech giant has collaborated with Lonza for the manufacture of mRNA-1273, a COVID-19 vaccine. It has also joined hands with Catalent for fill-finish manufacturing the vaccine. At the end of 2019, MRNA had 11 programs in clinical trials and a total of 20 development candidates in six modalities.
MRNA has already completed the enrolment of 30,000 participants in its Phase 3 clinical trials in collaboration with NIH and BARDA. In October, the company also announced a supply agreement with Qatar for its Covid-19 vaccine candidate, mRNA-1273.
During the third quarter ended September 2020, MRNA’s revenue surged 823.7% year-over-year to $157.9 million, driven by massive growth in its grant revenue. The company’s loss per share expanded to $0.59 from $0.37 mainly due to a 189% year-over-year increase in the Research & Development expense for the mRNA-1273 candidate. At the end of the third quarter, MRNA had a cash balance of nearly $4 billion.
The consensus estimate for revenue for the fourth quarter is $182.1 million, indicating a year-over-year increase of 1,195.8%. Meanwhile, EPS is expected to grow at a rate of 16.8% per annum over the next five years.
On a year-to-date basis, MRNA soared 416.5% to close yesterday’s session at $98.56. During the past six months, the stock climbed 46.2%.
How does MRNA stack up for the POWR Ratings?
A for Trade Grade
A for Buy & Hold Grade
A for Peer Grade
A for Overall POWR Rating
It can’t get better than this as the stock is also ranked #1 in the Biotech industry.
BioNTech SE (BNTX)
BNTX is a German biotechnology company that develops and commercializes immunotherapies for cancer and other infectious diseases. The company develops and manufactures active immunotherapies for patient-specific approaches for treating diseases. BNTX is involved in developing FixVac product candidates which includes treatment for various forms of cancer. The company has collaboration with Genentech, Eli Lilly, and Company, Sanofi S.A., Bayer AG, Pfizer, Genmab A/S, Genevant Sciences GmbH.
In association with Pfizer (PFE), BNTX has requested the FDA to grant emergency use authorization (EUA) to their mRNA-based COVID-19 vaccine candidate, BNT162b2. The objective behind this request is to start a vaccination process for the high-risk people and frontline workers. Both the companies have also begun submissions to regulatory authorities in the UK, Australia, Europe, Canada, and Japan.
BNTX’s revenue for the three months ended September 2020 climbed 135.8% year-over-year to EUR 67.4 million. Meanwhile, its loss per share expanded to EUR 0.88 from EUR 0.14 posted in the same period last year, primarily on account of higher R&D expenses and increased headcount towards the development of the coronavirus vaccine candidate. Besides, BNTX has made progress in its broad oncology pipeline of 11 clinical-stage therapies across 4 distinct drug classes during the quarter.
Analysts expect revenue for the quarter ending December to be $358.1 million, indicating an increase of 1050% year-over-year. Meanwhile, EPS is likely to rise 237.9% to $0.40.
BNTX rallied 214.3% on a year-to-date basis to close at $101.87 yesterday. Over the past six months, the stock surged 108.7%.
It’s no surprise that BNTX is rated a “Strong Buy” in our POWR Ratings system, with a grade of “A” in Trade Grade, and “B” in Buy and Hold Grade, and Peer Grade. In the 389-stock Biotech industry, it is ranked #32.
Acceleron Pharma Inc. (XLRN)
XLRN focuses on the discovery, development, and marketing of therapeutics to treat serious and rare diseases. The company is also involved in the development of luspatercept-aamt for the cure of myelodysplastic syndromes and myelofibrosis. XLRN also has license agreements with Celgene Corporation and Fulcrum Therapeutics for finding a pathbreaking cure for pulmonary diseases.
Earlier this month, XLRN announced plans to launch the first Phase 3 clinical trial, called STELLAR, to evaluate the safety and effectiveness of sotatercept (ACE-011), its investigational therapy for pulmonary arterial hypertension (PAH) before the end of 2020.
During the third quarter ended September 2020, XLRN’s collaboration revenue surged 436.1% year-over-year to $22.5 million due to the sales uptick for REBLOZYL in the United States and Europe. XLRN made considerable progress this year with the market expansion and adoption of REBLOZYL. The company’s net loss per share for the quarter narrowed to $0.66 from $0.86 posted in the same period last year.
XLRN soared 114.2% year-to-date to end yesterday’s session at $114.09. The stock climbed 15.2% over the past six months.
Analysts expect revenue for the full year 2020 to increase to $98.3 million, signaling a 32.9% year-over-year growth. Meanwhile, EPS for the period is expected to rise 20.2% over the prior year.
XLRN’s strong fundamentals are reflected in its POWR Ratings. It has a “Strong Buy” rating with an “A” in Trade Grade and Peer Grade, and a “B” in Buy & Hold Grade. It is ranked #38 in the Biotech industry.
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MRNA shares were trading at $104.20 per share on Wednesday morning, up $5.64 (+5.72%). Year-to-date, MRNA has gained 432.72%, versus a 14.15% rise in the benchmark S&P 500 index during the same period.
About the Author: Namrata Sen Chanda
Namrata is an accomplished financial journalist, with nearly a decade of experience. She specializes in interpreting news releases and framing investment strategies, and has worked with some of the leading companies in real estate, banking, insurance, mutual funds, financial research, fintech, and investment education.3 Top Biotech Stocks to Buy for 2021 appeared first on StockNews.com