With close to $130 million in market capitalization, late clinical-stage biopharmaceutical company Athira Pharma, Inc. (ATHA) focuses on advancing new therapies for neurodegenerative diseases.
In a recent ACT-AD Phase 2 study conducted in Alzheimer’s disease (AD) patients, ATHA’s lead candidate, fosgonimeton, failed to meet the primary and secondary endpoints when given in combination with AChEIs. This led to JMP Securities downgrading this small-cap stock. Shares of ATHA have declined 62.6% over the past month.
Moreover, the company’s financials spell weakness. In its fiscal 2022 first quarter (ended March 31, 2022), ATHA’s loss from operations came in at $23.39 million, up 116.9% from the prior-year period. Its loss per share grew 124% year-over-year to $0.56. Our proprietary rating system has rated this stock Sell. So, it is best avoided now.
However, rising investments in R&D for developing drugs, vaccines, and therapies for chronic and emerging diseases and the integration of advanced technologies should help the biotech industry grow substantially in years to come.
Also, fruitful collaborations with industry leaders should allow companies to enhance their pipeline portfolios. The global biotechnology market is expected to grow at a 13.9% CAGR to reach 3.88 trillion by 2030. Investors’ interest in this industry is evident from the SPDR S&P Biotech ETF’s (XBI) 13.7% gains over the past month versus the SPDR S&P 500 Trust ETF’s (SPY) 7% loss.
Quality large-cap stocks Vertex Pharmaceuticals Incorporated (VRTX), Amgen Inc. (AMGN), United Therapeutics Corporation (UTHR), and Sino Biopharmaceutical Limited (SBHMY) could perform better than ATHA. So, it could be wise to invest in these stocks instead.
Vertex Pharmaceuticals Incorporated (VRTX)
VRTX develops, manufactures, and commercializes medicines for serious diseases. The company is focused on developing and commercializing therapies to treat cystic fibrosis (CF) and advancing its research and early-stage development programs.
It sells its products primarily to specialty pharmacies and distributors in the United States, specialty distributors, retail chains, and hospitals and clinics internationally. It has a $73.91 billion market capitalization.
On June 8, 2022, the FDA granted VRTX’s inaxaplin (VX-147) Breakthrough Therapy Designation for APOL1-mediated focal segmental glomerulosclerosis (FSGS), and the EMA has granted inaxaplin Priority Medicines (PRIME) designation for APOL1-mediated chronic kidney disease (AMKD).
This ninth breakthrough therapy designation granted across its portfolio programs in the U.S. should help VRTX witness wide reach across the industry.
For its fiscal 2022 first quarter ended March 31, 2022, VRTX’s total revenues increased 21.6% year-over-year to $2.10 billion. The company’s non-GAAP operating income came in at $1.17 billion, representing a rise of 16.4% from the year-ago period.
Its non-GAAP net income came in at $907.10 million, indicating a 16.1% rise from the prior-year period. VRTX’s non-GAAP EPS increased 18.1% year-over-year to $3.52. The company had cash and cash equivalents of $7.60 billion as of March 31, 2022.
Analysts expect the company’s EPS to grow 9.1% year-over-year to $14.20 for fiscal 2022 ending December 31, 2022. It surpassed the consensus revenue estimates in each of the four trailing quarters, which is impressive. The consensus revenue estimate of $8.58 billion for the same fiscal year represents a 13.2% year-over-year improvement.
The company’s EPS is expected to grow at a rate of 10.9% per annum over the next five years. The stock has gained 31.6% year-to-date and 7.1% over the past three months to close the last trading session at $288.98.
VRTX’s POWR Ratings reflect this promising outlook. The stock has an overall A grade, which equates to Strong Buy in our proprietary rating system. The POWR Ratings are calculated by considering 118 distinct factors, with each factor weighted to an optimal degree.
It has an A grade for Quality and a B grade for Value, Sentiment, and Growth. Click here to see the additional ratings for VRTX’s Momentum and Stability.
VRTX is ranked #1 of 400 stocks in the Biotech industry.
Amgen Inc. (AMGN)
AMGN is a biotechnology company that discovers, develops, manufactures, and delivers human therapeutics focused on inflammation, oncology/hematology, bone health, cardiovascular disease, nephrology, and neuroscience areas worldwide.
It distributes its products through pharmaceutical wholesale distributors and direct-to-consumer channels. It has a $131.80 billion market capitalization.
On June 6, 2022, the FDA approved AMGN’s RIABNI, a biosimilar to Rituxan, in combination with methotrexate for adults with rheumatoid arthritis (RA).
Already in use for treating adult patients with Non-Hodgkin’s Lymphoma (NHL), Chronic Lymphocytic Leukemia (CLL), Granulomatosis with Polyangiitis (GPA), and Microscopic Polyangiitis (MPA), this approval should help RIABNI to gain wide market reach.
AMGN’s total revenues for its fiscal 2022 first quarter ended March 31, 2022, increased 5.7% year-over-year to $6.24 billion. The company’s non-GAAP operating income came in at $3.14 billion, up 9.6% from the year-ago period.
AMGN’s non-GAAP net income came in at $2.34 billion, representing a 9% rise from the prior-year period. Its non-GAAP EPS came in at $4.25, indicating a 14.9% year-over-year improvement. As of March 31, 2022, the company had $6.53 billion in cash and cash equivalents.
Analysts expect the company’s EPS to grow 2% year-over-year to $17.44 for fiscal 2022 ending December 31, 2022. It surpassed the consensus EPS estimates in each of the four trailing quarters. The consensus revenue estimate of $26.22 billion for the same fiscal year represents a 0.9% year-over-year improvement.
Its EPS is expected to grow at a rate of 7.1% per annum over the next five years. The stock has gained 9.7% year-to-date and 0.9% over the past three months to close the last trading session at $246.73.
AMGN’s POWR Ratings reflect this promising outlook. The stock has an overall A grade, equating to Strong Buy in our proprietary rating system.
It has an A grade for Quality and a B grade for Stability and Growth. Click here to see the additional ratings for AMGN’s Sentiment, Value, and Momentum.
AMGN is ranked #2 in the Biotech industry.
United Therapeutics Corporation (UTHR)
With a $10.74 billion market capitalization, UTHR is a biotechnology company that engages in developing and commercializing products to address the unmet medical needs of patients with chronic and life-threatening diseases internationally.
It is also engaged in early-stage research and development of several organ transplantation-related technologies, including regenerative medicine, xenotransplantation, and ex-vivo lung perfusion.
In partnership with leading 3D printing solutions provider 3D Systems Corporation (DDD), UTHR produced the complex 3D-printed human lung scaffold demonstrated at the LIFE ITSELF Conference held between May 31 to June 3, 2022.
Consisting of a record 44 trillion voxels that layout 4,000 kilometers of pulmonary capillaries and 200 million alveoli, scientists plan to cellularize it with a patient’s stem cells to create tolerable, transplantable human lungs that do not require immunosuppression to prevent rejection. This should gain wide recognition across the industry.
UTHR’s total revenues for its fiscal 2022 first quarter ended March 31, 2022, increased 21.8% year-over-year to $461.90 million. The company’s operating income came in at $288 million, versus $64.80 million in the prior-year period. Its net income came in at $239.90 million for the quarter, representing a 747.7% year-over-year improvement.
UTHR’s EPS increased 724.6% year-over-year to $5.03. It had $3.83 billion in cash, cash equivalents, and marketable securities as of March 31, 2022.
The consensus EPS estimate of $17.70 for fiscal 2022 ending December 31, 2022, indicates a 75.9% year-over-year improvement. Analysts expect the company’s revenue to hit $1.90 billion for the same fiscal year, indicating a 12.6% rise from the prior-year period.
Its EPS is expected to grow at a rate of 1.9% per annum over the next five years. The stock has gained 9.8% year-to-date and 28.4% over the past three months to close the last trading session at $237.15.
UTHR’s POWR Ratings reflect its solid prospects. The stock has an overall A rating, equating to Strong Buy in our proprietary rating system.
It has a B grade for Value, Growth, Sentiment, and Quality. In addition to the POWR Ratings grades we have just highlighted, one can see UTHR’s Momentum and Stability ratings here.
UTHR is ranked #3 in the Biotech industry.
Sino Biopharmaceutical Limited (SBHMY)
SBHMY is a Hong Kong-based research and development pharmaceutical conglomerate that focuses on areas of oncology, cardio-cerebral vascular, hepatitis, orthopedic, respiratory system, parenteral nutrition, and others. It manufactures chemical medicine products and modernizes Chinese medicine products. It has a 12.54 billion market capitalization.
On June 23, 2022, SBHMY’s invoX Pharma subsidiary, focused on R&D and business development outside China, announced the acquisition of F-star Therapeutics, Inc. (FSTX), a clinical-stage biopharmaceutical company pioneering bispecific immunotherapy, for approximately $161 million.
Adding FSTX’s unique set of pharmacology and proprietary platform technology that uses tetravalent (2+2) bispecific antibodies will help invoX enhance its product portfolios and gain wide market reach.
SBHMY’s revenue for its fiscal 2021 full year ended December 31, 2021, increased 13.6% year-over-year to RMB26.86 billion ($4.01 billion). The company’s gross profit came in at RMB21.53 billion ($3.21 billion), representing a 16.6% year-over-year improvement. Its pre-tax profit came in at RMB18.57 billion ($2.78 billion) for the quarter, up 270.5% from the year-ago period.
While its net profit increased 44.7% year-over-year to RMB16.62 billion ($2.48 billion), its EPS grew 45.7% to RMB72.26 cents. As of December 31, 2021, it had RMB10.57 billion ($1.58 billion) in cash and bank balances.
Analysts expect the company’s revenue to improve 8.2% year-over-year to $4.58 billion for fiscal 2022 ending December 31, 2022. The stock closed the last trading session at $12.76.
SBHMY’s POWR Ratings reflect this promising outlook. The stock has an overall A rating, equating to Strong Buy in our proprietary rating system.
It has a B grade for Growth, Value, Quality, and Stability. Click here to see the additional ratings for SBHMY’s Momentum and Sentiment.
SBHMY is ranked #4 in the same industry.
ATHA shares were trading at $3.40 per share on Wednesday afternoon, down $0.03 (-0.87%). Year-to-date, ATHA has declined -73.91%, versus a -18.74% rise in the benchmark S&P 500 index during the same period.
About the Author: Sweta Vijayan
Sweta is an investment analyst and journalist with a special interest in finding market inefficiencies. She’s passionate about educating investors, so that they may find success in the stock market.
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