As biotechnology continues to propel breakthroughs in pharmaceuticals, genomics, and medical devices, the spotlight is increasingly drawn to this sector for growth and portfolio diversification. With this in mind, investors could keep a close eye on quality biotech stocks Akebia Therapeutics, Inc. (AKBA), Organogenesis Holdings Inc. (ORGO), Alnylam Pharmaceuticals, Inc. (ALNY), and G1 Therapeutics, Inc. (GTHX) in May.
The biotech industry is experiencing significant growth fueled by the increasing demand for medicines, especially personalized ones, and cutting-edge therapies to address evolving medical needs. The global biotechnology market is projected to grow at a CAGR of 14% until 2030.
Moreover, President Biden's administration recently launched the National Bioeconomy Board to coordinate biotechnology efforts across public and private sectors. Historic investments through initiatives like the Inflation Reduction Act and Bipartisan Infrastructure Law continue to strengthen the biotech industry, with over $20 billion in private biomanufacturing investments since the administration began.
Further, the growing interest among investors in biotech stocks is vividly demonstrated by the impressive performance of the SPDR Series Trust SPDR S&P Biotech ETF (XBI), which has seen a remarkable increase of 33.4% in returns over the past six months.
Given these encouraging trends, let’s look at the fundamentals of the top Biotech stocks, beginning with the fourth choice.
Stock #4: Akebia Therapeutics, Inc. (AKBA)
AKBA is a biotech company that leads kidney disease treatment with Vafseo (vadadustat) for CKD anemia and Auryxia for phosphorus control and iron deficiency. Its pipeline also addresses critical-care needs and premature birth-related conditions.
On March 28, 2024, AKBA received FDA approval for Vafseo® (vadadustat) Tablets to treat anemia due to chronic kidney disease (CKD) in adults on dialysis for at least three months. Vafseo, a once-daily oral HIF-PH inhibitor, stimulates erythropoietin production to manage anemia. Approved in 37 countries, this milestone offers a new treatment option for Americans on dialysis.
During the fiscal fourth quarter ended December 31, 2023, AKBA’s net product revenue rose 5.9% year-over-year to $53.23 million. Its total revenues grew marginally from the prior-year quarter to $56.20 million. The company reported an operating income of $1.37 million, compared to a loss of 4.87 million in the year-ago quarter.
AKBA’s revenue is estimated to improve 14.9% year-over-year to $46.09 million in the fiscal first quarter that ended March 2024. Its EPS for the same quarter is likely to grow 45.2% from the prior year. Additionally, it has surpassed the consensus EPS estimates in three of the trailing four quarters, which is remarkable.
The stock has soared 57.1% over the past six months, closing the last trading session at $1.32.
AKBA’s POWR Ratings reflect its promising outlook. The stock has an overall rating of C, which translates to a Neutral in our proprietary rating system. The POWR Ratings are calculated by considering 118 different factors, with each factor weighted to an optimal degree.
It has an A grade for Growth and a B for Value. In the 360-stock Biotech industry, AKBA is ranked #34.
In addition to the POWR Ratings stated above, one can access AKBA’s Momentum, Stability, Sentiment, and Quality grades here.
Stock #3: Organogenesis Holdings Inc. (ORGO)
ORGO is a regenerative medicine company that develops, manufactures, and commercializes solutions for the advanced wound care, surgical, and sports medicine markets in the United States.
During the fiscal year that ended December 31, 2023, ORGO generated net revenue of $433.14 million. Its gross profit was $326.66 million. The company’s adjusted net income stood at $12.68 million, and its net income per share came in at $0.04.
Additionally, as of December 31, 2023, its total assets amounted to $460.03 million, compared to $449.36 million as of December 31, 2022.
For fiscal year 2024, the company anticipates net revenue to range between $445 million and $470 million, representing a 3% to 9% increase compared to the previous year. Moreover, adjusted EBITDA is expected to range from $15.80 million to $35 million.
Street expects ORGO’s revenue to increase 5% year-over-year to $454.78 million in the fiscal year 2024.
Over the past year, the stock has gained 19.8% to close the last trading session at $2.46.
ORGO’s POWR Ratings reflect sound prospects. The stock has an overall rating of B, which translates to a Buy in our proprietary rating system.
It has an A grade for Value. It is ranked #30 in the same industry.
Click here to see ORGO’s Growth, Momentum, Stability, Sentiment, and Quality ratings.
Stock #2: Alnylam Pharmaceuticals, Inc. (ALNY)
ALNY pioneers RNA interference-based therapeutics. Its lineup stars ONPATTRO for hereditary transthyretin-mediated amyloidosis, GIVLAARI for acute hepatic porphyria in adults, and OXLUMO fighting primary hyperoxaluria type 1.
On April 7, ALNY announced positive results from the KARDIA-2 Phase 2 study, which assessed the effectiveness and safety of a single subcutaneous dose of zilebesiran alongside one of three standard-of-care antihypertensive medications: indapamide, amlodipine, or olmesartan.
Zilebesiran, an investigational RNAi therapeutic, targets liver-expressed angiotensinogen (AGT) and is being developed for hypertension treatment, potentially requiring biannual dosing.
During the fiscal fourth quarter that ended December 31, 2023, ALNY’s net product revenues increased 32.3% year-over-year to $346.29 million. Its royalty revenue rose 525.7% from the year-ago value to $17.02 million. As of December 31, 2023, its total current assets stood at $2.98 billion, compared to $2.69 billion as of December 31, 2022.
ALNY’s revenue is projected to increase 33.7% year-over-year to $426.86 million for the first quarter that ended March 2024. Moreover, the company surpassed consensus EPS estimates in three of the trailing four quarters.
The stock rose 2.8% intraday to close the last trading session at $147.36.
ALNY’s steady fundamentals are reflected in its POWR Ratings. The stock has an overall rating of B, which translates to a Buy in our proprietary rating system.
It has a B grade for Sentiment. It is ranked #29 in the same industry.
To access additional ratings for ALNY’s Value, Growth, Momentum, Quality, and Stability, click here.
Stock #1: G1 Therapeutics, Inc. (GTHX)
GTHX, the cancer-fighting powerhouse, pioneers small molecule therapeutics to combat cancer's toughest challenges. With COSELA leading the charge to ease chemotherapy's grip, and Trilaciclib blazing trails in breast and bladder cancer, the company is rewriting the story of cancer treatment.
On February 28, GTHX announced that the Phase 3 PRESERVE 2 trial, testing trilaciclib with gemcitabine and carboplatin for mTNBC, will continue to its final analysis as recommended by the Independent Data Monitoring Committee.
Moreover, on the same day, GTHX revealed that the initial efficacy results from an ongoing Phase 2 trial indicate improved overall survival (OS) in metastatic triple-negative breast cancer (mTNBC) patients receiving trilaciclib with a TROP2 ADC compared to the ADC alone.
GTHX’s COSELA vial volume increased by 19% in the fourth quarter of 2023 (December 31, 2023) compared to the previous quarter, attributed to the alleviation of shortages in platinum-based chemotherapy. As a result, its total revenues increased 45.1% year-over-year to $14.87 million, and its net product sales grew 57% from the year-ago quarter to $13.92 million.
Its total operating expenses decreased 42.1% from the previous-year quarter to $23.80 million. Also, as of December 31, 2023, the company’s cash and cash equivalents, and marketable securities, and total assets totaled $82.16 million and $121.54 million, respectively.
In its financial forecast for fiscal year 2024, GTHX projects COSELA net revenue to fall between $60 million and $70 million.
Analysts expect GTHX’s revenue for the first quarter (ended March 2024) to increase 16.5% year-over-year to $15.08 million. Its EPS is likely to grow 62.6% from the previous year. Moreover, the company has exceeded the consensus revenue estimates in three of the trailing four quarters.
GTHX’s stock has climbed 144.7% over the past six months to close the last trading session at $3.72.
GTHX’s POWR Ratings reflect its robust outlook. The stock has an overall rating of B, which translates to a Buy in our proprietary rating system.
GTHX has a B grade for Value, Growth, and Sentiment. It is ranked #28 in the same industry.
Beyond the POWR Ratings we’ve highlighted above, we also have GTHX’s other ratings for Momentum, Stability, and Quality. Get all GTHX ratings 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.
ALNY shares were unchanged in premarket trading Tuesday. Year-to-date, ALNY has declined -23.01%, versus a 7.22% rise in the benchmark S&P 500 index during the same period.
About the Author: Kritika Sarmah
Her interest in risky instruments and passion for writing made Kritika an analyst and financial journalist. She earned her bachelor's degree in commerce and is currently pursuing the CFA program. With her fundamental approach, she aims to help investors identify untapped investment opportunities.
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