Biotech is the future and the industry is growing. However, it will take time to get mature if we talk about the market. The industry is still in the early stages of growth and we all know that investing in biotech stocks isn’t for the faint of heart. Hence there is a need to know about the best biotech stocks.
They tend to be pretty volatile, experiencing massive price surges and slumps. The reason for all these swings is simple – biotech stocks trade on catalysts. There is a high level of uncertainty in the industry as biotech stocks march to the drum of regulatory approval, the outcomes of trial data, and major conference presentations. Often, stocks in the sector will zoom higher or sink lower on these pieces of information.
We have compiled the five best Biotech stocks to buy and hold in November 2021.
Johnson & Johnson
Johnson & Johnson (JNJ) is shaping up to be in a good position as its vaccine receives positive remarks from the Food and Drug Administration. Moreover, JNJ stock is trading around its major support zone in the 52-week period.
JNJ is driven by a few notable strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks. The company’s strengths can be seen in multiple areas. That includes its revenue growth, largely solid financial position with reasonable debt levels by most measures and reasonable valuation levels.
JNJ’s revenue growth has slightly outpaced the subsector average of 22.6%. Since the same quarter one year prior, revenues rose by 27.1%. Growth in the company’s revenue appears to have helped boost the earnings per share.
The current debt-to-equity ratio, 0.48, is low and is below the subsector average, implying that there has been successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.04, which illustrates the ability to avoid short-term cash problems.
Net operating cash flow has significantly increased by 53.93% to $5,314.00 million when compared to the same quarter last year. The firm also exceeded the subsector average cash flow growth rate of 17.72%.
With all this and unanimous approval for JNJ’s COVID-19 booster dose for emergency use, JNJ stock is one to look forward to in November.
Sesen Bio (SESN) had a great year till August unless the stock price plummeted to 52-week lows. That was after the FDA declined to approve its BLA for Vicineum for a type of bladder cancer. Vicineum is currently in phase 2 for head and neck cancer.
Following the disapproval, Sesen approved a restructuring plan to cut the expenses and match the needs of the business. That will help the company to achieve the required targets for its bladder cancer therapy Vicineum. Through this plan, Sesen expects to lower its annual cash costs by approximately $5.7 million.
You might be curious about what could make SESN stock perform better in the coming month. Sesen Bio recently expanded its chemistry, manufacturing, and control (CMC), and clinical development teams. The company has hired two new members.
The company already submitted a request for the CMC Type A meeting, which is anticipated to occur at the end of October. Sesen expects the clinical Type A meeting to occur later in the fourth quarter of 2021.
SESN stock is trading just above half a cent, which puts the stock on the huge upside. The current ratio and quick ratio look quite good, with both at 9.30. We could see investors buying the stock sooner but that will depend on positive developments around its Vicineum project.
The next stock in the list of the best biotech stocks is ALKS. Alkermes (ALKS) is a fully integrated, global biopharmaceutical company developing innovative medicines in the fields of neuroscience and oncology.
Alkermes stock has soared over 55% year-to-date. The biotech stock has continued the bullish momentum despite the recent market volatility. ALKS is trading just below its 52-week high. What’s pushing the stock?
To a certain degree, ALKS continues to ride the momentum from its strong second-quarter results announced in late July. Alkermes reported revenue of approximately $304 million. That’s a 23% increase year over year. While the adjusted profit increased by 5.5 times to $49.2 million from last year period.
This growth stemmed from strong sales across the board for Alkermes’ two products on the market. That includes its antipsychotic drug Aristada and alcohol- and drug-abuse therapy Vivitrol. The company’s royalties from antipsychotic drugs Risperdal Consta, Invega Sustenna, and multiple sclerosis drug Vumerity also increased.
Apart from that, Alkermes has had positive results from its pipeline in recent months as well. In June, the FDA approved Lybalvi as a treatment for schizophrenia and bipolar 1 disorder. Following that, in August, the FDA granted Fast Track designation to nemvaleukin alfa in treating mucosal melanoma. These are some good news for ALKS that are acting as a catalyst.
The SMA-50 is rising and is up by 4.17% and if it crosses the SMA-200, which is increasing at 31.63%, ALKS stock would pump further. Alkermes has now an improved IBD SmartSelect Composite Rating of 96. That means the stock is now outperforming 96% of all other stocks in terms of key performance metrics and technical strength. At the same time, Jefferies recently upgraded ALKS from hold to buy with a price target of $36.
Blueprint Medicines Corporation
Blueprint (BPMC) is one of the leading biotech firms that is focused on genomically defined cancers, rare diseases, and cancer immunotherapy. BPMC’s research is based on so-called small-molecule drugs. Unlike regular biologic therapies, small-molecule drugs are more stable. That puts the company in a strong competitive position.
Since the second half of 2021 began, Blueprint Medicines has performed pretty well and is up by almost 7%. In the current quarter, BPMC has increased over 18%, which shows that strong momentum. The SMA-50 is 1.87% and is approaching SMA-200 which is 5.21%. That’s another indicator showing an upward trend for the stock.
Blueprint’s quarterly sales have increased by a whopping 228.90% and the EPS has increased by 176.90% in 2021. A significant portion of Blueprint’s revenues is from collaboration agreements like the one for pralsetinib with Roche. Collaboration revenue grew nearly sixfold to $15.9 million in Q2 2021 compared to $2.7 million in Q2 2020.
Both quick ratio and current ratio are at 5.60, which shows that the company is in a good position to fulfill its short-term goals.
Apart from that, the company received approval for the treatment of advanced systemic mastocytosis, Ayvakit. BPMC’s treatment has received breakthrough designation status from the FDA. With Ayvakit already causing a major boost to Blueprint Medicines’ sales in a short amount of time, any additional wins for the drug should be a windfall. That could play a major role as a catalyst for BPMC stock.
MIRM is the next stock in the bucket of the best biotech stocks. Mirum Pharmaceuticals (MIRM) is known for the development of a late-stage pipeline of novel therapies for liver diseases. The company mainly targets diseases that have a high unmet medical need. In the current quarter, the stock has risen over 8%.
Mirum recently announced that its drug became the first U.S.-approved therapy for treating itching in patients with a rare liver disorder called Alagille syndrome (ALGS). The company has also submitted a Marketing Authorization Application to the European Medicines Agency (EMA). If Mirum attains approval from EMA, it will be an extra booster for MIRM stock.
Following the drug approval in the U.S., Mirum is now authorized to sell the drug in the country. The drug will be immediately available under the brand name Livmarli, at $1,550 per unit. SVB Leerink analyst Mani Faroohar expects Livmarli could easily reach peak sales of $400 million in ALGS indication by 2030.
Whereas, Mirum executives estimated a total market opportunity of about $500 million for the indication.
MIRM stock is currently signaling a good buy as the SMA-50 has just crossed SMA-200. The RSI is around 46.60. Along with the drug approval, MIRM can be your biotech stock for November 2021. Moreover, JP Morgan has initiated an overweight rating with a price target of $30.