The biotech industry proved itself resilient in the face of the COVID-19 pandemic. With research from Mckinsey, venture capitalist (VC) companies increased investments from 2,200 in 2016 to 3,100 in 2021 in biotechnology (biotech) startups.
These startups have advanced medicine overall, improving cell therapy, tissue regeneration, genetic medicine, and more. With increasing innovation, we see an ongoing cycle. VC companies will continue to invest by providing resources and funding for these companies. The future of this industry is set for long-term growth.
These three stocks are set to grow based on the innovative breakthroughs and maintenance of stellar financials in macroeconomic headwinds.
Jazz Pharmaceuticals (JAZZ)
Jazz Pharmaceuticals (NASDAQ:JAZZ) is an Ireland-based biopharmaceutical company. Even though JAZZ stock is down 15.89%, plenty of long-term growth tailwinds will help JAZZ stock recover in the coming years.
Jazz’s financials are performing exceptionally well. First quarter 2023 resulted in revenue of $892.81 million that grew 9.72% year over year, net income of $69.42 million that grew 4114.94% YOY, and diluted EPS of $1.04 grew 3366.67% YOY. Net profit margin remains high, as a 7.78% is up 3790% YOY, and operating income of $197.11 million increased by 30.11% YOY.
Jazz Pharmaceuticals has recently entered a Letter of Intent with the pan-Canadian Pharmaceutical Alliance (pCPA) for Rylaze. The drug is essential in treating acute lymphoblastic leukemia and lymphoblastic lymphoma in children and young adults. It is reliable to manufacture across all of Canada. Rylaze demonstrated effective among 90% of patients tested in phase 2 of 3 trials. Jazz’s intent to provide its resources to help out with this clause speaks volume to its international expansion and resources.
For the last two decades, Jazz has been pioneering innovative medicines for rare, hard-to-treat disorders. Jazz has constantly been able to improve its sleep medicine, having treatments even for oncology and epilepsy. The company has stated that it will continue to invest in the development of new medicines for underserved communities, broadening the overall scope of its consumer base.
Yahoo! Finance reports 16 analysts predicting JAZZ stock to grow. These analysts have ended up with a mean 12-month price target of $201.38, with the range spanning from $140.00 to $240.00. JAZZ stock is a promising long-term stock, with medicines that pioneer innovative treatments across the globe.
Amgen Incorporated (AMGN)
Amgen has robust financials. Second quarter revenue of $6.99 billion beat analyst expectations by $10.2 million, and EBIT grew 10.7% YoY. EPS of $5.00 beat analyst expectations by $0.51 and is growing at a 25.6% CAGR. Management has been handling operational expenditures well, yielding a 37.7% levered FCF margin over its sector median, a 173.4% ROCE, and a 74.8% gross profit margin.
Amgen is progressing this year by gaining drug approvals from the Food and Drug Administration (FDA). The company gained full FDA approval for Blincyto, its new lymphoblastic leukemia treatment, and for the self-administration of Tezspire, a prefilled pen medication for asthmatics. Amgen also gained approval for Amjevita, the second-ever severe anti-inflammatory drug approved by the FDA. These approvals result from Amgen’s successful research and clinical trials, expanding wide impact on patients around the world.
Additionally, Amgen has made partnerships that enhance future drug research. In May, Amgen partnered with TScan on research to identify toxic cells in Crohn’s disease. This collaboration could lead to a groundbreaking drug that surpasses current anti-inflammatory treatments, which can further lead to innovations in the Crohn’s disease drug market and benefit Amgen’s overall revenue. Amgen also announced that it will join the Alliance for Genomic Discovery which includes industry leaders AbbVie, AstraZeneca, and Mayer. This alliance gives Amgen access to 250,000 whole genome sequenced (WGS) samples, a valuable resource for future research and development practices.
With a buy rating from analysts and a median predicted 12-month upside of 4.83%, AMGN is a biotech stock with a positive outlook. This is completely due to its robust financials, series of drug approvals from the FDA, and partnerships for success.
Exelixis Incorporated (EXEL)
Exelixis Incorporated (NASDAQ:EXEL) is a biotech company known for CABOMETYX, a medicine for renal cell carcinoma (the most common type of kidney cancer) and common liver cancers.
The biotech industry is currently valued at $753.48 billion and is growing at a 15.5% CAGR. EXEL stock is up 24.4% year to date, and key financials are rapidly growing such as a 2022 revenue of $1.6 billion up 12.27% YOY. Yahoo! Finance reports 15 analysts having a 12-month average price target of $25.07, with the range spanning as low as $17.00 to as high as $32.00.
Exelixis’ main product, CABOMETYX, earned approximately $410 million in Q2 2023. However, Exelixis has also recognized the amazingly rapid growth of the biotech industry and is using its advanced research to make sure it can stay relevant. By figuring out tumor mechanisms and traits, the company can test multiple drug combinations and increase rates of treatment success.
Currently, Exelixis is expanding its treatments into colorectal and prostate cancer, letting the firm use data collected from these trials to increase the number of treatments offered. Additionally, Exelixis’ competitive advantage lies within its extensive research in biotherapeutics and molecular drugs. The company figures out how tumors grow and shuts down tissue functions, allowing examiners to create treatments for a broader variety of cancer types.
Exelixis’ CABOMETYX and its expansion into different types of cancer forecast EXEL stock as an emerging growth stock.
On the date of publication, Michael Que did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.