3 Top Biotech Stocks to Consider in February

Biotech stocks are notoriously volatile. But despite dramatic volatility in the general stock market the last week or two, biotech and other healthcare related stocks have been relatively stable. Some have even popped. Analysts with The Motley Fool looked at three biotech stocks that even biotech-leery investors might consider.

#1. Madrigal Pharmaceuticals. Headquartered in West Conshohocken, Pennsylvania, Madrigal Pharmaceuticals is focused on developing drugs for cardio-metabolic and fatty liver diseases. Its lead product candidate is MGL-3196 for non-alcoholic steatohepatitis (NASH) and familial dyslipidemias/hypercholesterolemias. NASH is a fatty-liver disease similar to cirrhosis, but occurs in people who don’t drink alcohol. It is associated with the obesity epidemic and related disorders such as diabetes.

The company has three NASH candidates in its pipeline. They are selonsertib, GS-9674, and GS-0976. There has been speculation that Madrigal would be an excellent acquisition target for Gilead Sciences, should the hepatitis C, HIV and liver-disease giant plan to acquire more this year.

Keight Speights, with The Motley Fool, notes, “Actually, the stock already is a big winner. Madrigal ranked as the No. 3 healthcare stock of 2017, with a whopping 516 percent gain last year. So far in 2018, the stock is up well over 50 percent. Why such excitement over a clinical-stage biotech? Madrigal claims a very promising drug for treating nonalcoholic steatohepatitis (NASH).”

And there’s an enormous unmet medical need for NASH treatments.

#2. Cambrex. Based in East Rutherford, New Jersey, Cambrex High Point manufactures active pharmaceutical ingredients (API) which is sells to other companies, or manufactures them on behalf of other pharma companies. Chuck Saletta, with The Motley Fool, writes, “Its choice of area to operate in gives Cambrex a better shot at reliable profitability than most other biotech companies. What makes it a worthwhile potential investment now is its reasonable price compared to its anticipated profits. Cambrex currently trades at a mere 17 times its anticipated earnings, and those earnings are expected to grow by around 15 percent annualized over the next five years. That’s a reasonable price to pay for any company, much less one in the high-risk world of biotech.”

#3. Pieris Pharmaceuticals. Located in Boston, Massachusetts, Pieris focuses on immuno-oncology and respiratory diseases. It has strategic alliances with Servier and AstraZeneca, among others. On February 16, it closed on its initial public offering, raising about $50.6 million by selling 6,325,000 shares of common stock at a price of $8 per share. Shares are currently trading for $8.63.

The Motley Fool’s Brian Feroldi writes, “A handful of positive developments caused the company’s stock to skyrocket 437 percent in 2017, a huge jump that put this company on my radar. When I found out that Pieris has already signed a number of collaboration deals with big pharma companies like AstraZeneca, Allergan, Sanofi, Roche, Daiichi Sankyo, and most recently Seattle Genetics, my ears really started to perk up.”

Much of the interest is based on the company’s proprietary technology program that it uses to engineer proteins that are used to target a wide range of diseases. It currently has 12 compounds in development in three disease categories.