Pharma Stocks Today: The Cream Of The Crop – Top 5 Biotech Stocks
As we step into the latter part of the year, biotech stocks are staging a noteworthy comeback, with significant momentum noted in mid-October when they regained their 50-day moving average. This resurgence was largely driven by favorable results from Wave Life Sciences (WVE) regarding RNA editing, which acted as a catalyst for the sector as a whole. Though the overall interest in biotech has waned following the initial COVID boom and subsequent focus on diverse economic and political circumstances, specific stocks continue to demonstrate robust performance and potential. Currently, the biotech industry group holds a Relative Strength Rating of 83, ranking it in the top 17% of all industry categories in terms of 12-month performance.
Key Biotech Stocks to Watch
Among the biotech stocks trading above $10, five companies stand out based on their technical and fundamental metrics:
- Corcept Therapeutics (CORT)
- United Therapeutics (UTHR)
- Halozyme Therapeutics (HALO)
- Harmony Biosciences (HRMY)
- ADMA Biologics (ADMA)
No. 1 Biotech Stock: Corcept Therapeutics
Corcept Therapeutics has ascended to the top of the biotech landscape, showcasing a diverse pipeline catering to conditions such as Cushing syndrome, various cancers, neurological disorders, as well as addiction and psychiatric issues. Their flagship drug, Korlym, specifically treats patients with Cushing syndrome and concomitant type 2 diabetes. The company reported adjusted earnings of 32 cents per share with impressive sales of $163.8 million in Q2, marking a 14% surge in earnings that exceeded expectations by 9 cents. Moreover, sales outperformed forecasts with a growth rate exceeding 39%.
Technical analysts noted that Corcept’s stock recently broke out of a cup base, achieving a buy point at $39.75 on September 17. Investors are advised to consider taking profits when a stock rises by 20% to 25% above its entry point. Corcept holds a Composite Rating of 96 and an RS Rating of 97, establishing it as a Tech Leader.
Focusing On Treatments For PAH: United Therapeutics
Another powerhouse in the sector, United Therapeutics, has made a name for itself primarily through therapeutics for chronic diseases. Its leading drug, Tyvaso, for pulmonary arterial hypertension (PAH), demonstrated a 25% sales increase to $398.2 million during the June quarter, although it fell short of expectations. Analysts have noted a timeline shift for the final-phase PAH study results, now anticipated in 2026 rather than 2025.
The stock reached an all-time high on September 3 but has seen a recent dip. United Therapeutics maintains a strong Composite Rating of 98, despite a lower RS Rating of 93. After breaking out of a flat base with a buy point at $366.08, it remains a firm contender in the Tech Leaders category.
This Biotech Stock Gets Under Your Skin: Halozyme Therapeutics
Halozyme is excelling in drug delivery, particularly utilizing its Enhanze technology, which facilitates subcutaneous drug administration. This technology underpins significant drugs such as Johnson & Johnson’s Darzalex Faspro and Roche’s Herceptin, and it has recently gained approval for a subcutaneous version of Roche’s multiple sclerosis treatment.
In the second quarter, Halozyme reported adjusted earnings of 91 cents per share with sales totaling $231.4 million, reflecting a year-over-year increase of 23% and 5%, respectively. The stock jumped over 4% following its earnings release. Looking ahead, Halozyme maintains a solid guidance for fiscal 2024, projecting adjusted earnings of $3.65 to $4.05 per share.
With a Composite Rating of 96 and a respectable RS Rating of 84, Halozyme’s stock remains under its 50-day moving average but above its 200-day line, indicating healthy long-term growth potential.
Harmony’s Pipeline In A Product: Harmony Biosciences
Harmony Biosciences is carving its niche with its lead product, pitolisant, currently marketed as Wakix for narcolepsy. The company is exploring additional indications, including idiopathic hypersomnia and Prader-Willi syndrome. In Q2, Wakix generated $172.8 million in sales, a strong 29% year-over-year growth.
Despite being below its 50-day line, Harmony’s stock carries a Composite Rating of 98 and an RS Rating of 81, demonstrating promising prospects for future growth as it aims to reclaim a buy point at $35.40.
ADMA Biologics Faces a Setback
Despite a strong run, ADMA Biologics experienced a significant setback following the unexpected resignation of its independent auditor on October 10, which prompted a stock drop of over 16%. Known for its human immune globulin products, ADMA previously reported impressive earnings of 14 cents per share in Q2 with a 78% sales surge. Nonetheless, amid uncertainties, it remains above its 200-day moving average while below its 50-day line, holding the highest ratings with an RS and Composite rating of 99.
Conclusion
In summary, the biotechnology sector is demonstrating signs of revitalization, with specific companies leading the charge. Investors should keep a vigilant eye on these top-rated stocks as they navigate both the complexities of biotech innovation and shifting market dynamics. The aforementioned companies, particularly Corcept Therapeutics, United Therapeutics, Halozyme, and Harmony Biosciences, present compelling investment opportunities bolstered by strong fundamentals and technical performance. Though challenges exist, notably for ADMA Biologics, the overall outlook for the biotech sector appears promising as we move toward the conclusion of 2023.
