Amid a challenging market environment, one of your best bets could be to target biotech stocks to buy. Yes, the sector can be volatile because much hinges on underlying breakthroughs. Nevertheless, biotechnology firms offer advantages that you won’t find anywhere else.
Primarily, this ecosystem tends to march to its own beat. That doesn’t mean it’s immune to broader market and economic pressures. However, it’s not unusual for certain biotech stocks to buy to trend horizontally (or even move higher) during wider downcycles. These companies are attempting to help people and that never goes out of style.
That brings up a second point: permanent relevance. While no one company is shielded from downside, the pursuit of forwarding medical innovations will continue so long as humans walk the earth. This may offer a baseline of confidence. If you’re to place your wagers, below are compelling biotech stocks to buy.
AbbVie (ABBV)
A specialist in the discovery, development, manufacture and distribution of pharmaceuticals worldwide, AbbVie (NYSE:ABBV) deserves consideration for biotech stocks to buy. Per its public profile, the company is perhaps best known for offering Humira, which is an injection for autoimmune and intestinal Behçet’s diseases. It also provides Skyrizi to treat moderate to severe plaque psoriasis.
Primarily, I’m highlighting AbbVie for its acquisition of Allergan. Through the buyout, AbbVie controls Botox, the anti-wrinkle treatment. Moving forward, I anticipate that as generations of young people grow older and develop wrinkles that Botox demand will skyrocket. It’s just based on the core shift in social mores. With the advent of social media, people are obsessed with their looks.
Admittedly, ABBV is a slow-and-steady investment but that might suit conservative investors. For fiscal 2024, covering experts anticipate revenue of $55.05 billion, up 1.4% from last year’s haul of $54.32 billion. And in the following year, the top line could rise to $58.18 billion.
In the meantime, the company provides a forward annual dividend yield of 3.79%. ABBV makes for a solid starting point for biotech stocks to buy.
Eli Lilly (LLY)
Eli Lilly (NYSE:LLY) discovers, develops and markets human pharmaceutical products globally. It offers a variety of solutions. Per its corporate profile, the company has developed a series of therapeutics called Humulin which targets diabetes. In addition, it features a range of products for cancer. As well, Eli Lilly is also involved in the mental health space, providing Cymbalta for depressive disorder.
For me, Eli Lilly makes a powerful case for biotech stocks to buy thanks to its wide-ranging relevance. As well, it commands an enviable operational profile. For example, the company’s three-year revenue growth rate comes in at 12%, above 67.9% of its peers. It’s consistently profitable, featuring a robust net margin of 17.08%. In contrast, the sector median for the drug manufacturing industry is 3.5%.
For fiscal 2024, experts anticipate revenue to land at $42.5 billion or up 24.5% from last year’s tally of $34.12 billion. In the following year, sales could rise to $52.35 billion, up 23.2% from projected 2024 revenue.
To be fair, LLY is traded at a hot sales multiple of 18.48X. Still, at the end of the first quarter, the multiple ran up to 20.59X.
Novo Nordisk (NVO)
Novo Nordisk (NYSE:NVO) engages in the research and development, manufacture and distribution of pharmaceutical products in multiple international markets. According to its public profile, the company operates in two segments: Diabetes and Obesity Care, and Rare Diseases. For the latter, Novo Nordisk offers products in the areas of rare blood disorders, rare endocrine disorders and hormone replacement therapy.
It’s fair to say, though, that Diabetes and Obesity Care has taken the spotlight recently. According to BioPharma Dive, the company offers a drug called amycretin, “one of a handful of medicines Novo hopes can build on the success of its fast-selling obesity drug Wegovy. Unlike Wegovy, amycretin stimulates two gut hormones, GLP-1 and amylin, that affect appetite and blood sugar levels. It’s also taken orally, not via injections.”
Analysts anticipate that in fiscal 2024, sales will rise to $41.6 billion. If so, that would represent a 25.6% lift from last year’s print of $33.13 billion. Further, fiscal 2025 revenue could hit $49.79 billion, a 19.7% gain from projected 2024 sales.
It’s not much but the company also provides a forward yield of 1.11%. It’s one of the top biotech stocks to buy.
Pfizer (PFE)
As one of the top biotech stocks to buy during the worst of the Covid-19 period, Pfizer (NYSE:PFE) incurred significant seesawing in its price action. During the crisis, demand for a Covid vaccine skyrocketed for understandable reasons. Pfizer was one of the first across the clinical finish line. However, demand for the solution plunged in 2022. That took down PFE stock.
However, for speculators with a long-term view, Pfizer could be an intriguing idea. With the acumen developed in forwarding a messenger-RNA-based vaccine, the company could potentially leverage the knowledge for other health concerns and chronic conditions. Further, PFE stock is significantly deflated.
Right now, shares trade for only 12.43X forward earnings. That’s lower than the sector median 14.79X. However, experts project earnings per share to expand in fiscal 2024 to $2.28. Last year, EPS was $1.84. And in fiscal 2025, this metric could soar to $2.73, with a blue-sky target of $3.15.
While you’re waiting for a possible recovery to pan out, Pfizer offers a forward dividend yield of 6.04%. It’s something to think about.
Viking Therapeutics (VKTX)
Moving onto the more speculative ideas for biotech stocks to buy, we’ll begin with Viking Therapeutics (NASDAQ:VKTX). A clinical-stage biopharmaceutical firm, Viking focuses on the development of novel therapies for metabolic and endocrine disorders. The company’s lead drug candidate is VK2809. Currently, this drug is undergoing Phase 2b clinical trials to treat patients with biopsy-confirmed non-alcoholic steatohepatitis (NASH).
It’s also developing an orally available androgen receptor modulator called VK5211. Right now, this therapeutic is in Phase 2 trials for the treatment of patients recovering from non-elective hip fracture surgery. Viking is also drawing attention to VK0612, a Phase 2b-ready drug candidate that addresses type 2 diabetes.
For fiscal 2024, analysts anticipate a loss per share of $1.12. That’s an expansion from last year’s loss per share of 91 cents. Further, the red ink could grow to a loss of $1.55 in fiscal 2025. Therefore, the focus here centers on the many clinical trials.
It’s a hit-or-miss affair. Nevertheless, analysts rate VKTX a unanimous strong buy with a $113.50 price target.
Roivant Sciences (ROIV)
A commercial-stage biopharma firm, Roivant Sciences (NASDAQ:ROIV) engages in the development and commercialization of medicines for inflammation and immunology areas. It provides Vants, which is a model to develop and commercialize its medicines and technologies focusing on biopharmaceutical businesses, discovery-stage companies and health technology startups.
In addition, Roivant has developed VTAMA, a novel topical solution for the treatment of psoriasis and atopic dermatitis. As well, the company offers IMVT-1402, a fully human monoclonal antibody targeting specific autoimmune diseases.
Per covering experts, ROIV carries a strong buy view with a $17 average price target. Further, the most optimistic forecast calls for $23 per share. Financially, analysts expect a massive performance for fiscal 2024, with EPS projected to hit $4.26. In contrast, Roivant delivered a loss per share of $1.58 last year.
On the top line, sales could skyrocket to $145.2 million. If so, that would represent a dramatic lift of 136.9% from last year’s tally of $61.28 million. And in fiscal 2025, the top line could expand again to $172.12 million, with a blue-sky target of $242.19 million.
Cytokinetics (CYTK)
A late-stage biopharma specialist, Cytokinetics (NASDAQ:CYTK) focuses on discovering, developing and commercializing muscle activators and inhibitors as potential treatments for debilitating diseases. It develops small-molecule drug candidates primarily engineered to impact muscle function and contractility. Among its drug candidates is omecamtiv mecarbil, a novel cardiac myosin activator that is in Phase 3 trials for patients with heart failure.
According to its corporate profile, Cytokinetics also develops CK-136, a novel cardiac troponin activator that’s currently in Phase 1. In addition, it offers CK-586, a small-molecule cardiac myosin inhibitor. According to the Centers for Disease Control and Prevention, heart disease is the leading cause of death for men and women in the U.S. Therefore, Cytokinetics features a massive total addressable market.
For the current year, analysts aren’t hoping for much. Indeed, sales could might only land at $6.35 million, down 15.7% from last year’s haul of $7.53 million. However, in fiscal 2025, the top line could potentially soar to $142.36 million. If so, that would be up 2,141.9% higher than projected 2024 sales. Also, the blue-sky target calls for revenue of $394.65 million.
On the date of publication, Josh Enomoto did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.