The biotechnology industry includes companies that develop drugs and diagnostic compounds for the treatment of diseases and medical conditions. These products must go through a rigorous, costly, and time-consuming testing process before potentially obtaining approval from the U.S. Food and Drug Administration (FDA). This means that investors may wait for years before knowing whether a drug under development will pay off. The group includes small start-up companies that focus on single drugs as well as large, well-established corporations that generate dozens of potential new drugs each year. Some of the largest biotechnology companies in the world include Amgen Inc. (AMGN), Regeneron Pharmaceuticals Inc. (REGN), and Biogen Inc. (BIIB). Many biotech companies have been rushing to develop tests and treatments for COVID-19. During the past year, biotech stocks, as represented by the iShares Nasdaq Biotechnology ETF (IBB), have posted a total return of 23.5% compared to the Russell 1000's total return of 21.8% as of December 7, 2020. All data below are as of December 8, 2020.
Here are the top 3 biotech stocks with the best value, the fastest earnings growth, and the most momentum.
Best Value Biotech Stocks
These are the biotech stocks with the lowest 12-month trailing price-to-earnings (P/E) ratio. Because profits can be returned to shareholders in the form of dividends and buybacks, a low P/E ratio shows you’re paying less for each dollar of profit generated.
|Best Value Biotech Stocks|
|Price ($)||Market Cap
|12-Month Trailing P/E Ratio|
|Catalyst Pharmaceuticals Inc. (CPRX)||3.43||355.5||5.1|
|Innoviva Inc. (INVA)||10.62||1,077||5.4|
|Voyager Therapeutics Inc. (VYGR)||8.16||305.7||7.8|
- Catalyst Pharmaceuticals Inc.: Catalyst Pharmaceuticals is a biopharmaceutical company that develops and commercializes therapies for debilitating neurological and neuromuscular diseases. The company serves customers across the U.S. For Q3 2020, the company reported a 5.1% year-over-year (YOY) decline in total revenue and a 218.0% YOY increase in net income. The net income gains were primarily driven by a one-time benefit from a deferred tax asset.
- Innoviva Inc.: Innoviva is an asset management company focused on health care that engages in the development, commercialization, and financial management of biopharmaceuticals.
- Voyager Therapeutics Inc.: Voyager Therapeutics is a gene therapy company. Voyager develops treatments for patients afflicted by severe central nervous systems diseases. In the most recent quarter Voyager reported positive trial data for potential therapies for the treatment of both Parkinson's and Huntington's Diseases.
Fastest Growing Biotech Stocks
These are the biotech stocks with the highest YOY earnings per share (EPS) growth for the most recent quarter. Rising earnings show that a company’s business is growing and is generating more money that it can reinvest or return to shareholders.
|Fastest Growing Biotech Stocks|
|Price ($)||Market Cap ($B)
||EPS Growth (%)|
|BioDelivery Sciences International Inc. (BDSI)||4.19||0.4||2,570|
|Biomarin Pharmaceutical Inc. (BMRN)||78.39||14.2||1,240|
|Vertex Pharmaceuticals Inc. (VRTX)||227.06||59.0||1,050|
- BioDelivery Sciences International Inc.: Biotechnology firm BioDelivery Sciences International designs and manufactures vaccines, drug products, and pharmaceuticals. BioDelivery Sciences posted more than 23-fold gain in net income on a 30% YOY increase in net revenue. Sales soared for several of its prescription products, including: BELBUCA, which treats severe pain; and Symproic, which treats side effects from opioid treatment.
- BioMarin Pharmaceutical Inc.: BioMarin Pharmaceutical is a developer of therapeutic enzyme products used in treatments for serious burns and certain lysosomal storage diseases. In November, BioMarin announced a partnership with Deep Genomics, an artificial intelligence (AI) therapeutics company, to utilize AI to discover and develop potential therapeutics for four rare diseases.
- Vertex Pharmaceuticals Inc.: Pharmaceutical developer Vertex Pharmaceuticals specializes in drugs for the treatment of cancer, autoimmune disease, neurological disorders, cystic fibrosis, and inflammatory bowel disease.
Biotech Stocks with the Most Momentum
These are the biotech stocks with the highest total return over the last 12 months.
|Biotech Stocks with the Most Momentum|
|Price ($)||Market Cap ($B)||12-Month Trailing Total Return (%)|
|Trillium Therapeutics Inc. (TRIL.TO)||CA$19.57||CA$2.0||5,120|
|Novavax Inc. (NVAX)||123.12||7.8||2,730|
|Vaxart Inc. (VXRT)||7.70||0.8||2,310|
|iShares Nasdaq Biotechnology ETF (IBB)||N/A||N/A||23.5|
- Trillium Therapeutics Inc.: Trillium Therapeutics is a Canada-based biotechnology company specializing in clinical-stage immuno-oncology treatments. It has preclinical programs and therapies that focus on treating cancer. In its Q3 2020 report, the company shared promising data from studies for potential treatments to target several kinds of cancers, including those related to hematologic malignancies and lymphoma or multiple myeloma.
- Novavax Inc.: Novavax is a clinical stage biotechnology company that creates vaccines to address a wide range of infectious diseases.
- Vaxart Inc.: Vaxart is a biotechnology company that develops and markets oral flu vaccines. The company sells its products worldwide. On November 12, Vaxart reported results from its Hamster Challenge Study for a potential COVID-19 vaccine candidate, including a significant reduction in lung viral load among vaccinated animals as compared to non-vaccinated animals.
The comments, opinions and analyses expressed herein are for informational purposes only and should not be considered individual investment advice or recommendations to invest in any security or to adopt any investment strategy. While we believe the information provided herein is reliable, we do not warrant its accuracy or completeness. The views and strategies described on our content may not be suitable for all investors. Because market and economic conditions are subject to rapid change, all comments, opinions, and analyses contained within our content are rendered as of the date of the posting and may change without notice. The material is not intended as a complete analysis of every material fact regarding any country, region, market, industry, investment, or strategy.
YCharts. "YCharts." Accessed Dec. 8, 2020.
Catalyst Pharmaceuticals Inc. "Catalyst Pharmaceuticals Announces Third Quarter 2020 Financial Results and Provides Business Update." Accessed Dec. 8, 2020.
Voyager Therapeutics "Voyager Therapeutics Announces Third Quarter 2020 Financial Results and Corporate Updates." Accessed Dec. 8, 2020.
BioDelivery Sciences International Inc. "BioDelivery Sciences Reports Strong Q3 2020 Results." Accessed Dec. 8, 2020.
BioMarin Pharmaceutical Inc. "BioMarin and Deep Genomics to Collaborate on Advancing Programs Identified Using Artificial Intelligence." Accessed Dec. 8, 2020.
Trillium Therapeutics Inc. "Trillium Therapeutics Reports Third Quarter 2020 Financial and Operating Results." Accessed Dec. 8, 2020.
Vaxart Inc. "Vaxart Announces Additional Data from Hamster Challenge Study of its Oral COVID-19 Vaccine." Accessed Dec. 8, 2020.