Top 3 Biotech Stocks to Buy in 2018
Published: Dec 07, 2017
Health care is complicated. It involves numerous industries, including biopharma, insurance, medical devices, hospital care, clinical diagnostics, and numerous public and private entities. And, as Fortune notes, “Oh, and it just happens to be one of the nation’s most-battered political piñatas.”
Despite that, investors and analysts see the health care sector as showing promise for 2018. They project earnings in the health sector to rise 24 percent next year, boosted along by promising technology. However, Fortune points out that price to earnings ratios for health care stocks are some of the lowest in the S&P 500.
With that in mind, here’s a look at three promising biotech stocks.
Headquartered in Cambridge, Mass., Alnylam is working to develop an entirely new class of drugs based on RNA interference (RNAi). It currently has four late-stage programs. On Nov. 20, the U.S. Food and Drug Administration (FDA) granted its patisiran for transthyretin (TTR) for adults with hereditary transthyretin-mediated ATTR amyloidosis with polyneuropathy Breakthrough Therapy Designation (BTD).
Company stocks have grown 259 percent this year, largely on the promise of patisiran. Fortune notes, “But in the long term, the company’s bigger promise could be its underlying technology platform: ‘RNA interference,’ in which certain kinds of gene expressions can be ‘silenced’ to potentially treat all kinds of genetic diseases.”
Today, company shares rocketed 75 percent after Sage announced positive data of its SAGE-217 in a major depressive disorder (MDD). And on Nov. 9 the company’s brexanolone, for moderate and severe postpartum depression, had positive results in two late-stage clinical trials. The company’s stock climbed 54.2 percent that day and is up 44.1 percent over the last month.
Based in Cambridge, Mass., Sage focuses on developing drugs for central nervous system (CNS) disorders. The company’s shares are up 81 percent this year.
Based in Sunnyvale, California, Intuitive is best known for its da Vinci Surgical System, a robotic-assisted surgery system. At its third-quarter financial report on Oct. 19, the company indicated that da Vinci procedures had grown 15 percent compared to the same quarter in 2016, primarily driven by the U.S. general surgery market and worldwide urologic procedures. In the quarter alone, it had shipped 169 da Vinci Surgical Systems, up from 134 in the third quarter of 2016.
The company had a three-for-one split for issued and outstanding common stock. For the quarter, it reported $806 million in revenue, 18 percent up from the $683 million in the third quarter of 2016.
Although dominant in the field, there’s some big competition approaching. Johnson & Johnson has partnered with Alphabet to create Verb Surgical. And smaller competitors include Mazor Robotics and TransEnterix. Medtronic is also working in the area, specifically to develop robotics that provide surgeons with tactile response. It has teamed up with the German Aerospace Center to develop technology that provides tactile feedback to the robot operators.
Intuitive Surgical stock has grown 97 percent. Fortune writes, “The potential that the firm’s tech will be involved in an increasing number of procedure types in a growing number of countries is one reason it’s been lauded by analysts and investors…. A new generation of surgeons has embraced the technology—which allows doctors to perform surgeries without having to slice open patients, via a futuristic console that controls the da Vinci’s various arms.”