The biotech industry has been caught squarely in the limelight since the onset of the COVID-19 pandemic last year, as companies worldwide have raced to develop a vaccine. While several vaccines have been launched in the international markets since last year, an acute global vaccine shortage is the biggest concern now. Consequently, popular biotech companies with highly effective vaccines have been trying to expand their production capacities to meet the demand. Furthermore, the demand for drugs used in the treatment of this infection has also risen over time as several countries have witnessed the changing nature of the disease and its side effects.
In the United States, nearly 164 million people, or 49.5% of the population, have been fully vaccinated, according to the CDC. The Biden administration’s $10 million investment to expand access to the COVID-19 vaccines in the hardest hit communities in March has been a major driver in the country’s fast-paced vaccination program. Nevertheless, with some 50% of the population yet to be fully vaccinated, biotech companies with a vaccine candidate are expected to generate substantial revenues in the coming months. In addition, many companies have made major breakthroughs in the treatment of life-threatening ailments, thanks to the advancements in the field of biotechnology. And the industry’s focus on critical ailments is increasing.
Given this backdrop, we think biotech companies Moderna, Inc. (MRNA), Illumina, Inc (ILMN), Regeneron Pharmaceuticals, Inc. (REGN), and BioNTech SE (BNTX) should grow significantly in the coming months.
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Moderna, Inc. (MRNA)
MRNA develops transformative medicines based on messenger ribonucleic acid (mRNA). It specializes in the development of six types of drugs: prophylactic vaccines, cancer vaccines, intratumoral immuno-oncology, localized regenerative therapeutics, systemic secreted therapeutics, and systemic intracellular therapeutics. MRNA’s COVID-19 vaccine mRNA-1273 has been widely distributed across the United States. With a 94.1% efficacy rate, the MRNA vaccine is one of the most effective COVID-19 vaccines available globally. As of today, more than 124 million doses of MRNA vaccine have been administered across the United States.
On June 1, MRNA initiated the rolling submission process to apply for FDA approval for Biologics License Application (BLA) for its COVID-19 vaccine. The vaccine, which currently has emergency use approval, should receive FDA approval through this move, subject to fulfilment of requisite conditions.
MRNA received approval from Japanese and South Korean governments for distribution of its COVID-19 vaccine in those countries in May. To meet rising demand, the company entered a Manufacturing Services and Supply agreement with Samsung Biologics on May 22. MRNA plans to supply the vaccines manufactured in this facility to international markets other than the United States. Given the relatively low percentage of the international population currently vaccinated, MRNA has immense growth potential through its breakthrough COVID-19 vaccine.
On May 24, MRNA announced its expanded collaboration with Aldevron, LLC to support the production of its COVID-19 vaccine and some additions in Moderna’s clinical pipeline. With Aldevron’s expertise in the biologics space and MRNA’s capabilities in the development of vaccines and other therapeutics, this collaboration should facilitate MRNA’s long term growth.
MRNA’s net sales increased 24,112.5% year-over-year to $1.98 billion in the first quarter, ended March 31. Its operating profit grew 1,066.4% from its year-ago value to $1.27 billion, while its net income improved 1,084.7% year-over-year to $1.22 billion. The company’s EPS increased 911.4% year-over-year to $2.84.
Analysts expect MRNA’s revenues to increase 6,546% year-over-year to $4.41 billion in the current quarter, ending June 2021. A $6.20 consensus EPS estimate for the current quarter indicates a 2,100% rise from the same period last year.
Shares of MRNA have gained 233.1% over the past year, and 77.1% year-to-date.
It is no surprise that MRNA has an overall B rating, which equates to Buy in our proprietary POWR Ratings system. The POWR Ratings are calculated considering 118 different factors, with each factor weighted to an optimal degree.
The stock also has a B grade for Growth, Value and Quality. Among the 491 stocks in the Biotech industry, MRNA is ranked #24.
To see additional MRNA ratings for Sentiment, Stability and Momentum, click here.
Illumina, Inc (ILMN)
ILMN is a leading biotech company that operates in two segments–Core Illumina and consolidated variable interest entities. It provides sequencing and array-based solutions for genetic and genomic analysis internationally. The company is a major player in the consumer genomics and molecular diagnostics field.
On May 31, ILMN, Next Generation Genomic Co. Ltd, and the Association of Southeast Asian Nations (ASEAN) jointly launched VeriSeq™ NIPT Solution v2 in Thailand, a CE-IVD that is a next-generation sequencing based approach to non-invasive prenatal testing (NIPT). This breakthrough technology should allow ILMN to emerge as a prominent player in the genomics industry.
ILMN has now partnered with Belgian genetic centers to develop whole-genome sequencing to diagnose patients with intellectual disabilities and developmental disorders. This demonstrates ILMN’s immense overseas market reach.
ILMN’s revenue increased 27.2% year-over-year to $1.09 billion in its fiscal first quarter, ended April 4. Its gross profit stood at $764 million, up 23.4% from the same period last year. Its operating profit grew 2.1% from the year-ago value to $193 million. Its cash and cash equivalents balance rose 122.7% from the prior year quarter to $4.43 billion over this period.
A $1.01 billion consensus revenue estimate for the fiscal second quarter (ending June 2021) indicates a 48.6% increase year-over-year. The Street expects the company’s EPS to rise 116.1% from the prior-year quarter to $1.34 in the current quarter. ILMN has an impressive earnings surprise history as well as it beat the consensus EPS estimates in three of the trailing four quarters.
ILMN has gained 28% over the past six months to close yesterday’s trading session at $405.64. The stock has gained 9.6% year-to-date.
ILMN has an overall B rating, which equates to Buy in our proprietary POWR Ratings system. ILMN has an A grade for Quality, and a B grade for Growth. It is ranked #8 in the Biotech industry.
Click here to view additional ILMN Ratings for Momentum, Value, Sentiment and Stability.
Regeneron Pharmaceuticals, Inc. (REGN)
Regeneron Pharmaceuticals develops and manufactures drugs for treating serious ailments. REGN offers a wide range of medical products, which include its EYLEA (aflibercept) injection, its Praluent (alirocumab) injection, ARCALYST (rilonacept), an injection for subcutaneous use, its Kevzara (sarilumab) solution for subcutaneous injection and ZALTRAP (ziv-aflibercept) an injection for Intravenous Infusion.
On May 24, 2021 REGN announced that the European Medicines Agency’s (EMA) Committee for Medicinal Products for Human Use (CHMP) had adopted a positive opinion for Libtayo as a monotherapy for certain cancer treatments. If approved, this drug should allow REGN to grow significantly in the near term.
Earlier in May, REGN announced positive results from phase three pivotal clinical trials for REGEN-COV. The trials showed significantly lower risk of hospitalization or death of COVID-19 infected patients. Given many patients with asthma or COPD at higher risk of catching COVID-19 or developing complicated side-effects, this drug is expected to be widely demanded, if approved.
REGN’s net sales increased 38.3% year-over-year to $2.53 billion in the first quarter, ended March 31. Its operating profit grew 58.9% from its year-ago value to $1.11 billion, while its net income improved 78.5% year-over-year to $1.12 billion over the period. The company’s EPS increased 85.8% year-over-year to $10.09.
A $2.85 billion consensus revenue estimate for the fiscal third quarter ending September 2021 indicates a 36.4% improvement from the same period last year. Analysts expect the company’s EPS to come in at $10.13 in the next quarter, indicating a 21.2% rise year-over-year. Moreover, REGN surpassed the Street’s EPS estimates in each of the trailing four quarters.
REGN has gained 4% year-to-date. The stock gained 1.4% intraday to close yesterday’s trading session at $502.43.
REGN has an overall A rating, which equates to Strong Buy in our proprietary rating system. REGN has an A grade for Growth and Value, and B for Quality and Sentiment. It is ranked #1 in the same industry.
Beyond what we’ve stated above, we have also rated REGN for Momentum and Stability. Click here to view all REGN Ratings.
BioNTech SE (BNTX)
Based in Germany, BNTX specializes in developing and manufacturing immunotherapies for the treatment of cancer and other serious diseases. It has a wide product pipeline using different scientific approaches and technology platforms, including individualized mRNA-based product candidates, chimeric antigen receptor T-cells, checkpoint immunomodulators, targeted cancer antibodies and small molecules. In addition, the company also provides diagnostic products and drug discovery services for various infectious diseases and autoimmune disorders.
On May 28, BioNTech announced that its COVID-19 vaccine developed in collaboration with Pfizer, Inc. (PFE) received its first authorization from the European Union to be rolled out to adolescents aged 12-15 years. The vaccine was found to have an efficacy rate of 100% during the phase three clinical trials for participants aged 12-15 years. The company is sure to witness a surge in the demand for the vaccines and its revenue figures will also rise. The Pfizer-BioNTech vaccine has an overall efficacy rate of 95%, making it one of the most effective vaccines available globally.
In the same month, BNTX and PFE jointly signed agreements to supply 60 million doses of its vaccine to Turkey, and up to 1.80 billion additional doses to the European Union. BTNX’s revenues are expected to increase significantly in the coming quarters as countries race to fully vaccinate their populations.
BNTX’ non-GAAP revenues increased 7,294.9% year-over-year to €2.05 billion ($2.50 billion) in the first quarter, ended March 31. Its operating profit grew 2,903% from its year-ago value to €1.66 billion ($2.03 billion). BNTX’s net income came in at €1.13 billion ($1.38 billion), indicating a 2,212.5% rise year-over-year. The company’s EPS increased 1929.2% year-over-year to €4.39.
The Street expects BNTX’s revenues to rise 7,734.9% year-over-year to $3.87 billion in the current quarter, ending June 2021. A $9.11 consensus EPS estimate for the current quarter indicates a 2,124.4% improvement year-over-year.
Shares of BNTX have gained 335.3% over the past year, and 150.3% year-to-date.
It’s no surprise that BNTX has an overall rating of B, which equates to Buy in our POWR Ratings system. BNTX has a grade of A for Sentiment, and a B for Value. It is ranked #17 in the Biotech industry.
To see additional POWR Ratings for Growth, Stability, Momentum and Quality, click here.
Click here to checkout our Healthcare Sector Report for 2021
MRNA shares were trading at $184.66 per share on Tuesday afternoon, down $0.35 (-0.19%). Year-to-date, MRNA has gained 76.76%, versus a 12.62% rise in the benchmark S&P 500 index during the same period.
About the Author: Aditi Ganguly
Aditi is an experienced content developer and financial writer who is passionate about helping investors understand the do’s and don’ts of investing. She has a keen interest in the stock market and has a fundamental approach when analyzing equities. More…
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