The biotech industry is fueled by growing digitization and focus on developing personalized medicines. Given the industry’s steady growth prospects, investors could consider quality biotech stocks MacroGenics, Inc. (MGNX), Acorda Therapeutics, Inc. (ACOR), and Shionogi & Co., Ltd. (SGIOY), which are currently trading under $20.
The growing foothold of personalized medicine and an increasing number of orphan drug formulations are opening new avenues for biotechnology applications and are driving the influx of emerging and innovative biotechnology companies, further boosting market revenue.
The global biotechnology market is expected to grow at a CAGR of 14% until 2030.
Additionally, the growing adoption of AI technologies by biopharmaceutical companies has reduced the cost of the drug delivery process. The artificial intelligence in biotechnology market share is anticipated to grow at a CAGR of 29.7% until 2032.
Apart from this, the convergence of biotechnology with information technology, known as bioinformatics, that enhances data-driven insights for research and development is gaining traction.
With these favorable trends in mind, let’s delve into the fundamentals of the three best Biotech stocks, beginning with the third choice.
Stock #3: MacroGenics, Inc. (MGNX)
MGNX develops and commercializes monoclonal antibody-based cancer treatments. It sources its product candidates primarily from versatile antibody technology platforms with wide therapeutic applications. The company is working on product candidates targeting tumor-associated antigens and immune checkpoint molecules.
On March 22, MGNX reported that it would receive a $15 million milestone payment from Incyte Corporation (INCY) following the U.S. Food and Drug Administration’s (FDA) approval of ZYNYZ™, a PD-1 targeting antibody. ZYNYZ originated from MGNX’s collaboration with INCY, marking the third successful product approval from MGNX’s portfolio.
The FDA approval enhances MGNX’s financial standing, offering the potential for increased investments in research and development. The milestone payment reflects MGNX’s dedication to medical progress and reinforces its position in the biopharmaceutical industry.
For the second quarter that ended June 30, 2023, MGNX’s product sales net revenues increased 8.3% year-over-year to $5.06 million. Its net income and net income per common share stood at $57.47 million and $0.92, compared to a loss and loss per common share of $41.30 million and $0.67 in the prior year’s period, respectively.
The company’s revenue for the fiscal third quarter ending September 2023 is expected to increase 24.9% year-over-year to $52.12 million.
Over the past year, the stock has gained 20.5%, closing the last trading session at $5.12.
MGNX’s POWR Ratings reflect its promising outlook. The stock has an overall rating of B, which translates to a Buy in our proprietary rating system. The POWR Ratings are calculated by considering 118 different factors, with each factor weighted to an optimal degree.
MGNX has an A grade for Value and a B for Quality. It is ranked #26 in the 374-stock Biotech industry.
Click here to access the additional MGNX ratings (Growth, Momentum, Sentiment, and Stability).
Stock #2: Acorda Therapeutics, Inc. (ACOR)
ACOR is a biopharmaceutical company that develops and commercializes therapies for neurological disorders in the United States. The company markets Ampyra (dalfampridine), an oral drug to improve walking in adults with multiple sclerosis; and Inbrija, an inhaled levodopa for intermittent treatment of OFF periods in people with Parkinson’s disease treated with a carbidopa/levodopa regimen.
On August 2, 2023, ACOR announced that it had launched a new INBRIJA (levodopa inhalation powder) website and brand campaign. The campaign, “For the Fighters,” is based on direct feedback from people with Parkinson’s (PwPs). It honors the fighting spirit of the Parkinson’s community, encouraging PwPs to step up their fight by considering whether an on-demand treatment for OFF periods, such as INBRIJA, is right for them.
ACOR’s trailing-12-month gross profit margin of 76.58% is 37.6% higher than the industry average of 55.67%. Its trailing-12-month levered FCF margin of 17.21 is significantly higher than the industry average of 0.23%.
ACOR’s royalty revenues increased 3.4% year-over-year to $3.69 million in the fiscal second quarter that ended June 30, 2023. Operating loss decreased 73.9% year-over-year to $3.63 million and net loss decreased 79.9% year-over-year to $9.39 million. Also, net loss per common share decreased 86% year-over-year to $7.55.
ACOR’s shares have gained 62% over the past year to close the last trading session at $12.92.
ACOR’s strong fundamentals are reflected in its POWR Ratings. It has an overall rating of B, which equates to Buy in our proprietary rating system.
It has an A grade for Growth and a B in Value. Within the same industry, it is ranked #23.
Beyond what is stated above, we’ve also rated ACOR for Momentum, Stability, Quality and Sentiment. Get all ACOR ratings here.
Stock #1: Shionogi & Co., Ltd. (SGIOY)
Headquartered in Osaka, Japan, SGIOY is involved in researching, developing, manufacturing, and distributing pharmaceuticals, medical devices, and diagnostic reagents.
With a four-year average dividend yield of 1.80%, SGIOY pays an annual dividend of $0.24, which translates to a dividend yield of 2.41% on the current price level.
During the first quarter that ended June 30, 2023, SGIOY’s revenues rose 52.2% year-over-year to ¥109.31 billion ($740.96 million). The company’s operating profit and profit before tax grew 274.9% and 38.2% year-over-year to ¥46.59 billion ($315.18 million) and ¥55.70 billion ($377.57 million). Also, the company’s EPS rose 25.6% from the year-ago quarter to ¥144.57.
Analysts expect SGIOY’s revenue for the fiscal year 2023 to grow 7.1% year-over-year to $2.95 billion. Its EPS is expected to be $0.94 in the current year. In addition, the company has topped the consensus revenue estimates in all the trailing four quarters, which is impressive.
Shares of SGIOY have gained 2.2% over the past month to close the last trading session at $10.91.
It’s no surprise that SGIOY has an overall rating of B, which equates to Buy in our proprietary rating system.
SGIOY has an A grade for Value and a B for Growth and Quality. It is ranked #12 in the same industry.
In addition to the POWR Ratings highlighted above, one can access SGIOY’s ratings for Stability, Momentum, and Sentiment here.
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