Top Biotech Stocks for Q3 2022

QURE, EXEL, and SRRA are top for value, growth, and momentum, respectively

The biotechnology industry includes companies that develop drugs and diagnostic technologies for the treatment of diseases and medical conditions. These products must go through rigorous, costly, and time-consuming trials 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 industry includes smaller start-up companies with recent traction as well as large, well-established corporations that aim to develop a range of drugs and technologies. Many biotech companies have shifted their focus entirely or added COVID-19 vaccines and treatments to their product pipeline.

Early-stage biotech companies are prone to wild swings in revenue due to going from nearly no revenue to having a significant revenue stream once a drug is approved or a partnership with another company is reached. That means that growth numbers have to be thought of more as indicative of the company having achieved some sort of breakthrough regarding where they were with research, corporate partnerships, or other events in their corporate lifecycle, rather than how you'd normally think of growth.

During the past year, biotech stocks, as represented by the iShares Biotechnology ETF (IBB), have posted a total return of -21.0%, below the Russell 1000's total return of -14.3%. These market performance figures and all statistics in the tables below are as of June 17, 2022.

Here are the top biotech stocks with the best value, the fastest 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 that you’re paying less for each dollar of profit generated.

Best Value Biotech Stocks
  Price ($) Market Cap ($B)   12-Month Trailing P/E Ratio
uniQure NV (QURE) 13.54 0.6 2.0
BioNTech SE (BNTX) 129.15 31.4 2.2
ITeos Therapeutics Inc. (ITOS) 18.52 0.7 2.4

Source: YCharts

  • uniQure NV: uniQure NV is a Netherlands-based gene therapy company. It develops one-time administered treatments for patients with a variety of genetic diseases, including hemophilia B and Huntington's disease.
  • BioNTech SE: BioNTech SE is a German-based immunotherapy company focused on developing therapies for cancer and other serious diseases. The company, in collaboration with Pfizer Inc., developed a vaccine against COVID-19. On June 17, the FDA approved the Pfizer-BioNTech COVID-19 vaccine for emergency use in individuals 6 months through 4 years of age. Previously, the vaccine had been authorized for individuals 5 and older.
  • ITeos Therapuetics Inc.: ITeos Therapeutics is a clinical-stage biopharmaceutical company. It is focused on developing immuno-oncology therapeutics for cancer patients.

Fastest Growing Biotech Stocks

These are the top biotech stocks as ranked by a growth model that scores companies based on a 50/50 weighting of their most recent quarterly year-over-year (YOY) percentage revenue growth and most recent quarterly YOY earnings-per-share (EPS) growth. Both sales and earnings are critical factors in the success of a company. Therefore, ranking companies by only one growth metric makes a ranking susceptible to the accounting anomalies of that quarter (such as changes in tax law or restructuring costs) that may make one figure or the other unrepresentative of the business in general. Due to the nature of biotech business models, especially early on, earnings and revenue can undergo large growth spurts when a deal is made or a drug is approved, so we are not excluding outliers with growth of over 2,500% as we typically do.

Fastest Growing Biotech Stocks
Price ($) Market Cap ($B)   EPS Growth (%) Revenue Growth (%)
Exelixis Inc. (EXEL) 17.57 5.6 4,110 31.7
Beam Therapeutics Inc. (BEAM) 32.23 2.3 N/A (see company description) 140,400
United Therapeutics Corp. (UTHR) 217.67 9.9 724.6 21.8

Source: YCharts

  • Exelixis Inc.: Exelixis is an oncology-focused biotechnology company. It is working to discover and develop medicines for difficult-to-treat cancers. The company announced in early May financial results for Q1 of its 2022 fiscal year (FY), the three-month period ended March 31, 2022. Net income rose nearly 43-fold on revenue growth of 31.7% compared to the year-ago quarter. Exelixis' total operating expenses fell compared to the year-ago quarter, helping to boost net income.
  • Beam Therapeutics Inc.: Beam Therapeutics is a biotechnology company focused on developing precision genetic medicines using its gene editing and delivery technologies. Because the company's EPS was negative in the most recent quarter, an EPS growth rate could not be calculated in the table above.
  • United Therapeutics Corp.: United Therapeutics is a biotechnology company focused on developing pharmaceutical therapies as well as technologies that increase the availability of transplantable organs. The company announced in early May financial results for Q1 FY 2022, which ended March 31, 2022. Net income rose more than eightfold on revenue growth of 21.8% YOY. Total operating expenses fell compared to the year-ago quarter, which helped to boost net income.

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 (%)
Sierra Oncology Inc. (SRRA) 54.92 1.3 198.5
CTI BioPharma Corp. (CTIC) 5.80 0.6 142.7
BELLUS Health Inc. (BLU) 7.69 0.8 126.8
Russell 1000 N/A N/A -14.3
iShares Biotechnology ETF (IBB) N/A N/A -21.0

Source: YCharts

  • Sierra Oncology Inc.: Sierra Oncology is a late-stage biopharmaceutical company focused on developing targeted therapies to treat rare forms of cancer. The company announced in mid-April that it has agreed to be acquired by GlaxoSmithKline PLC. The transaction, which is valued at approximately $1.9 billion, is expected to close by the end of the third quarter of 2022.
  • CTI BioPharma Corp.: CTI BioPharma is a commercial biopharmaceutical company. It is focused on acquiring, developing, and commercializing targeted therapies for blood-related cancers.
  • BELLUS Health Inc.: BELLUS Health is a clinical-stage biotechnology company. It is focused on developing therapies for treating chronic cough and other hypersensitization disorders.

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.

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  1. YCharts. "YCharts."

  2. U.S. Food and Drug Administration. "Coronavirus (COVID-19) Update: FDA Authorizes Moderna and Pfizer-BioNTech COVID-19 Vaccines for Children Down to 6 Months of Age."

  3. Exelixis Inc. "Exelixis Announces First Quarter 2022 Financial Results and Provides Corporate Update."

  4. Beam Therapeutics Inc. "Beam Therapeutics Announces Pipeline and Business Highlights and Reports First Quarter 2022 Financial Results."

  5. United Therapeutics Corp. "United Therapeutics Corporation Reports First Quarter 2022 Financial Results."

  6. Sierra Oncology Inc. "GSK Reaches Agreement to Acquire Late-Stage Biopharmaceutical Company Sierra Oncology For $1.9bn."

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