Top 5 biotech stocks to keep your portfolio healthy

Thursday, January 10, 2019 6:58 AM | Brad Spears

Now that 2019 is in full swing, many people are just beginning to make the necessary changes to keep those New Year’s resolutions on track. For many, the focus of the new year revolves largely around health. Whether it be eating healthier, losing weight, or getting more exercise, lots of people set new goals for themselves at this time of year. Financial success is another goal that many people put into focus, with most taking a reflective look at the past and trying to keep an optimistic outlook for the future.

This week, we will be using the Stock Score Report to locate the top-ranked biotech stocks. It has been a great start to the new year for pharmaceutical companies and stocks in the biotechnology sector. Last week, Bristol-Myers Squibb (BMY) announced plans to acquire Celgene (CELG), taking shares of CELG from around $66.00 to upwards of $88.00. More recently, Eli Lilly (LLY) announced that it would be acquiring Loxo Oncology (LOXO) for $8 billion in cash or $235 per share, boosting LOXO’s share prices more than 66%. Share of Insmed Inc. (INSM) soared more than 42% this week following news that the company expects revenue upwards of $9.8 million in the next quarter from sales of the drug ARIKAYCE.

With all the mergers, acquisitions, and companies posting positive results in clinical trials, there has been a large focus on biotech recently, boosting interest in both biotech stocks and biotech ETFs, in turn boosting other stocks in the same sector. The Stock Score Report uses a combination of both technical and fundamental data to locate and rank a stock’s upside potential, with the technical data highlighting recent market strength and fundamental data showcasing a stocks expectation moving forward.

Health and wealth can go hand in hand, so let’s look at the top 5 biotech stocks to keep you and your portfolio healthy in 2019.

Vanda Pharmaceutical (VNDA)

Vanda Pharmaceutical develops and sells a portfolio of products for the treatment of central nervous system disorders. VNDA spiked sharply Dec. 3 after announcing positive phase II study results for the drug tradipitant in patients with gastroparesis. The stock sold off with the market in December but has since recovered, rising more than 22% from December lows.

VNDA has an overall score of 98, with an average analyst recommendation of Strong Buy. The stock is currently trading at $28.91 and has a fundamental score of 96, with a median target price of $42.50, which is 47% above the stock’s current price. VNDA scores a 98 in short-term technical and gets a near-perfect long-term technical score of 99.

Vanda Pharmaceutical is currently up over 105% year over year, with growth estimates over 77% in the next five years. The company has consistently beat Wall Street’s earnings per share expectations since early 2017 and are expected to report again February 13.

Axsome Therapeutics (AXSM)

Axsome Therapeutics is a pre-clinical therapeutics developer and healthcare service provider, primarily dealing with central nervous system disorders like Alzheimer’s, but also develops non-opioid therapeutics for chronic pain. AXSM rose from $2.63 to $6.87 on Monday, a rise of over 161%, continuing to rise as high as $9.16 following positive phase II trial results of AXS-05, a drug used in the treatment of depression disorders.

AXSM scores a perfect 100 in both short- and long-term technicals, with an overall score of 95. It holds a fundamental score of 86, with a median target price of $21.67, which is 176% higher than the stock’s current trading price of $7.83.

Horizon Pharma (HZNP)

Horizon Pharma is a specialty and generic drug manufacturing company that focuses on research and development, and the commercialization of medicines by acquiring, rebranding, repackaging, and repricing specialist drugs for sale in the United States.

HZNP is up over 37% since the beginning of 2018 and has been in a steady uptrend since late-December. On January 3, Horizon Pharma announced a collaboration with HemoShear Therapeutics for research and development of therapeutics for gout. On January 4, the company disclosed that it had sold the rights to RAVICTI and AMMONAPS outside of North America and Japan for $35 million.

HZNP beat quarterly earnings expectations on both the top and bottom line in the two previous quarters and is expected to report again on February 27th. HZNP gets an overall score of 90, with a high score of 97 in both short- and long-term technicals. The stock is currently trading at $21.19 and has a median target price of $25.63.

Amphastar Pharmaceuticals (AMPH)

Amphastar Pharmaceuticals develops, manufactures, and sells generic and proprietary injectable and inhalation products. Its products are used in hospitals or urgent care clinical settings for both critical and non-critical care.

On January 3, Amphastar Pharmaceuticals announced that Primatene MIST has been launched, and is now available at Walgreens and CVS locations. The company is seeking to manufacture additional inventory to provide the drug to other pharmacies and retails stores in the near future.

AMPH holds a short-term technical score of 91 and a long-term technical score of 97. The stock is currently trading at $21.46, with an average analyst recommendation of ‘Moderate Buy’ and target price of $23.80.

Vertex Pharmaceuticals (VRTX)

Vertex Pharmaceuticals discovers and develops drugs for the treatment cystic fibrosis, as well as developing HIV inhibitors and therapies for the treatment of cancer, pain, inflammatory diseases, influenza, and other rare diseases. Vertex was one of the first biotech firms to use an explicit strategy of rational drug design rather than combinatorial chemistry.

On January 4, Vertex Pharmaceuticals announced that the FDA granted Fast Track Designation for CTX001, a drug used in the treatment of sickle cell disease. The company has also announced multiple collaborations with other biotech and pharmaceutical companies in a combine effort to develop new medicines.

VRTX has risen 61% in the past five years, with earnings growth expectations of over 56% in the next five years. Vertex Pharmaceuticals has beaten earnings per share and revenue expectations every quarter since July 2017 and is expected to report again on January 30th.

VRTX is currently trading at $181.30 and hold a median target price of $203.05. The stock gets an overall score of 86, with a fundamental score of 71. VRTX scores highly in both short- and long-term technicals, with the stock being in an impressive uptrend since late December.

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