The biotech industry is growing as a result of increased research funding, expanded biotechnology applications in healthcare and agriculture, innovative therapies, and collaborations among academia, government, and private companies.
Given the industry’s growth prospects, fundamentally strong biotech ANI Pharmaceuticals, Inc. (ANIP), Vanda Pharmaceuticals Inc. (VNDA), and Corcept Therapeutics Incorporated (CORT) might be worth buying.
Before delving deeper into their fundamentals, let’s discuss what’s happening in the biotech industry.
Biotechnology has a significant impact on public health, pharmaceuticals, food, agriculture, and bioenergetics, improving diagnostic tools, vaccines, and therapies while revolutionizing the pharmaceutical industry.
The global biopharmaceutical industry is predicted to grow at a CAGR of 15.2% until 2032. The biopharmaceutical market is driven by increased R&D investments and technological advancements, as well as the rising prevalence of chronic diseases and an aging population.
Furthermore, the global biotechnology market is projected to grow at a CAGR of 13.4% until 2032. Investors’ interest in biotech stocks can be gauged from SPDR S&P Biotech ETF’s (XBI) 32% returns over the past three months.
Considering these conducive trends, let’s look at the fundamentals of the three Biotech stocks, starting with number three.
Stock #3: ANI Pharmaceuticals, Inc. (ANIP)
ANIP develops, manufactures, and markets both branded and generic prescription pharmaceuticals. It specializes in controlled substances, oncology products, hormones, steroids, injectables, and various formulations, such as extended-release and combination products.
On January 23, 2023, ANIP has announced the availability of Pentoxifylline Extended-Release (ER) Tablets, the generic version of Trental, a Reference Listed Drug (RLD). According to IQVIA/IMS Health estimates, the launch will cost roughly $19.7 million per year, allowing ANIP to maintain its generics business success in a moderately competitive market.
ANIP intends to gain a considerable market share and solidify its position as a prominent player in the generic pharmaceutical industry.
ANIP’s trailing-12-month EBIT margin of 9.02% is significantly higher than the industry average of 0.50%. Its 15.20% trailing-12-month levered FCF margin is significantly higher than the 0.14% industry average.
For the third quarter that ended September 30, 2023, ANIP’s net revenues increased 57.3% year-over-year to $131.83 million. Its adjusted EBITDA grew 98.3% from the year-ago value to $36.48 million.
Additionally, adjusted net income available to common shareholders and adjusted earnings per share grew 155.3% and 119% from the prior year’s period to $24.27 million and $1.27, respectively.
Analysts expect ANIP’s revenue to increase 5% year-over-year to $501.09 million for the quarter ending December 2024. Its EPS is expected to come in at $4.29 for the same period. Its EPS surpassed in all four trailing quarters. ANIP’s shares have gained 48% over past nine months to close the last trading session at $55.82.
ANIP’s POWR Ratings reflect this promising outlook. The stock has an overall rating of B, equating to a Buy in our proprietary rating system. The POWR Ratings assess stocks by 118 different factors, each with its own weighting.
ANIP has an A grade for Growth and Sentiment and a B for Value. Within the Biotech industry, it is ranked #25 out of 350 stocks. To see additional POWR Ratings for Stability, Momentum and Quality for ANIP, click here.
Stock #2: Vanda Pharmaceuticals Inc. (VNDA)
VNDA is a biopharmaceutical company that focuses on the development and commercialization of therapies to address high unmet medical needs worldwide. The company’s marketed products are used to treat non-24-hour sleep-wake disorders, schizophrenia, jet lag disorder, insomnia, delayed sleep phase disorder, sleep disturbances, etc.
VNDA’s trailing-12-month gross profit margin of 91.70% is 61% higher than the 56.95% industry average. Its 6.69% trailing-12-month levered FCF margin is significantly higher than the 0.14% industry average.
During the fiscal third quarter, which ended on September 30, 2023, VNDA’s total revenues amounted to $38.82 million. While its total operating expense came in at $44.81 million versus a total operating expense of $61.41 million in the prior-year quarter. In addition, as of September 30, 2023, its cash and cash equivalents amounted to $183.19 million, compared to $135.03 million as of December 31, 2022.
Street expects VNDA’s revenue come in at $148.50 million for the year ending December 2024. The stock has lost marginally intraday to close the last trading session at $3.60.
It’s no surprise that VNDA has an overall B rating, equating to a Buy in our POWR Ratings system. It has an A grade for Value and Quality and a B for Sentiment. It is ranked #23 in the same industry.
Beyond what is stated above, we’ve also rated VNDA for Growth, Stability and Momentum. Get all VNDA ratings here.
Stock #1: Corcept Therapeutics Incorporated (CORT)
CORT engages in discovery and development of drugs for the treatment of severe metabolic, oncologic, endocrine, and neurological disorders in the United States.
CORT’s trailing-12-month EBIT margin of 21.80% is significantly higher than the industry average of 0.50%. Its 35.59% trailing-12-month levered FCF margin is significantly higher than the 0.14% industry average.
In the third quarter that ended September 30, 2023, CORT’s revenues rose 21.5% year-over-year to $123.60 million. The company’s net income increased came in at $31.38 million. Its net income per common share came in at $0.31. Also, as of September 30, 2023, its total assets amounted to $594.02 million, compared to $583.43 million as of December 31, 2022.
The consensus revenue estimate of $581.88 million for the year ending December 2024 reflects a 21.9% rise year-over-year. Its EPS is expected to grow 8.1% year-over-year to $1.01 for the same period. The stock has lost 3.5% intraday to close the last trading session at $21.10.
CORT has an overall A rating, equating to a Strong Buy in our POWR Ratings system.
CORT’s is ranked #4 in the same industry. It has an A grade for Value and Quality. To see additional CORT’s ratings for Growth, Stability, Sentiment and Momentum, click here.
What To Do Next?
43 year investment veteran, Steve Reitmeister, has just released his 2024 market outlook along with trading plan and top 11 picks for the year ahead.
CORT shares were trading at $21.03 per share on Thursday morning, down $0.07 (-0.33%). Year-to-date, CORT has declined -35.25%, versus a 2.10% rise in the benchmark S&P 500 index during the same period.
About the Author: Rashmi Kumari
Rashmi is passionate about capital markets, wealth management, and financial regulatory issues, which led her to pursue a career as an investment analyst. With a master's degree in commerce, she aspires to make complex financial matters understandable for individual investors and help them make appropriate investment decisions.
The post 3 Biotech Stocks to Buy for Investor Security appeared first on StockNews.com