The biotechnology sector is poised for solid long-term growth, driven by significant developments in drug approvals, innovative therapies and government-backed initiatives. Therefore, investors might consider buying fundamentally sound biotech stocks ProQR Therapeutics (PRQR), Foghorn Therapeutics (FHTX), Harmony Biosciences (HRMY), and Organogenesis Holdings (ORGO) with huge buying potential. Keep reading.
The growth of the biotechnology sector depends on innovation, demand and technological breakthroughs. The expansion of personalized medicine, orphan drug formulations and cutting-edge technologies further contribute to the industry’s momentum. Let’s explore quality biotech stocks ProQR Therapeutics NV (PRQR), Foghorn Therapeutics Inc. (FHTX), Harmony Biosciences Holdings, Inc. (HRMY), and Organogenesis Holdings Inc. (ORGO) with huge buying potential.
In 2023, the U.S. Food and Drug Administration approved nearly 50% more new drugs than in 2022, matching historical approval rates. The FDA approved 55 breakthrough therapies, up from 37 in 2022 and 51 in 2021, with historical data indicating an annual average of 45-50 new drug approvals, reaching a peak of 59 in 2018. This positive trend could stimulate new investments in the sector.
Additionally, the growing adoption of plant-based meat alternatives and lab-grown meat, along with other protein-rich offerings, is driving a significant need for food biotechnology. Rapid progress in the field of biotechnology and genetics, especially in personalization of diets and nutritional plans, is expected to further contribute to the growth of the market.
The global biotechnology market is expected to grow at a CAGR of 14% through 2030.
Additionally, government initiatives continue to boost the industry with increased support for research and development. In Budget 2023, $5 billion was allocated to the Advanced Research Projects Agency for Health (ARPA-H). This funding aims to catalyze biomedical advances at various levels, from molecular to social, with the goal of creating innovative treatments for patients.
Furthermore, the expansion of personalized medicine and the introduction of orphan drug formulations provide new opportunities for biotechnology companies. Furthermore, cutting-edge medical technologies such as 3D bioprinting are used, which play a crucial role in the growth and advancement of the biotechnology sector.
The 3D bioprinting market is estimated to be worth $1.44 billion this year. It is expected to reach $3 billion by 2029, growing at a CAGR of 15.9%.
With these favorable trends in mind, let’s delve into the fundamentals of the four top biotech stock picks mentioned above.
Stock no. 4: ProQR Therapeutics NV (PRQR)
Headquartered in Leiden, the Netherlands, PRQR focuses on the discovery and development of new therapeutic drugs. The company’s product pipeline includes AX-0810 for cholestatic diseases affecting the Na-taurocholate cotransporter polypeptide (NTCP); and AX-1412 for cardiovascular disease (CVD) targeting Beta-1,4-galactosyltransferase 1 (B4GALT1).
PRQR’s trailing 12-month gross profit margin of 100% is 75.6% higher than the industry average of 56.94%. Its 15.23% Capex/Sales over the past 12 months is 259.1% higher than the industry average of 4.24%.
On January 11, PRQR partnered with the Rett Syndrome Research Trust (RSRT) to develop editing oligonucleotides (EONs) using ProQR’s Axiomer RNA editing technology. The collaboration aims to address mutations linked to the MECP2 transcription factor in Rett syndrome, a rare neurodevelopmental disorder.
During the fiscal third quarter ended September 30, 2023, PRQR’s revenue increased 68.3% year-over-year to €1.37 million ($1.48 million). Total operating costs decreased by 57.7% compared to the previous year quarter to €8.76 million (9.49 million). As of September 30, 2023, PRQR held cash and cash equivalents of €120.60 million ($130.59 million), compared to €94.8 million ($102.65 million) as of December 31, 2022.
Street expects PRQR’s revenue for fiscal 2023 to increase 274.7% year-over-year to $19.49 million. Its EPS for the same year is expected to increase 73% year over year.
Over the past three months, the stock has gained 78.6% to close the latest trading session at $2.09.
PRQR’s POWR ratings reflect its promising outlook. The stock has an overall rating of B, which translates to Buy in our proprietary rating system. POWR Ratings are calculated by considering 118 different factors, each optimally weighted.
It also has an A grade for growth and a B for sentiment. It is ranked 32nd in the Biotechnology sector with 349 stocks.
In addition to the POWR ratings above, you can see PRQR’s ratings for Value, Momentum, Stability, and Quality here.
Action no. 3: Foghorn Therapeutics Inc. (FHTX)
FHTX is a clinical-stage biopharmaceutical company engaged in the discovery and development of drugs that target genetically determined dependencies within the chromatin regulatory system. The company uses its proprietary Gene Traffic Control platform to identify, validate and potentially target drug drugs within the system.
FHTX’s trailing 12-month CAPEX/Sales of 4.47% is 5.4% higher than the industry average of 4.24%. The stock’s trailing 12-month cash per share of $1.67 is 31.5% higher than the industry average of $1.27.
In the fiscal third quarter, ending September 30, 2023, FHTX collaboration revenue increased 163.5% versus the prior-year quarter to $17.48 million, while total operating expenses decreased marginally versus to the prior-year quarter at $34.56 million. Additionally, the company’s cash and cash equivalents totaled $70.31 million, up 34.6% from $52.21 million as of December 31, 2022.
Analysts expect FHTX’s revenue to improve 71.9% year over year to $9.13 million in the fiscal first quarter, ending March 2024.
Over the past three months, the stock gained 11.9% to close the latest trading session at $3.75.
FHTX’s POWR Ratings reflect this strong outlook. The stock has an overall rating of B, which translates to Buy in our proprietary rating system.
It has a B grade for Sentiment and Quality. In the same sector, he is ranked 31st.
Click here to view FHTX’s ratings for Growth, Value, Momentum and Stability.
Action no. 2: Harmony Biosciences Holdings, Inc. (Human resources management)
HRMY is a commercial-stage pharmaceutical company focused on developing and commercializing therapies for patients in the United States with rare and other neurological diseases. It offers WAKIX (pitolisant), a molecule with a new mechanism of action for the treatment of excessive daytime sleepiness in adult patients suffering from narcolepsy.
HRMY’s trailing 12-month EBITDA margin of 41.29% is 710.6% higher than the industry average of 5.09%. Its trailing 12-month EBIT margin of 36.80% is significantly higher than the industry average of 0.54%.
On December 7, 2023, HRMY announced positive topline results from its Phase 2 signal detection study evaluating the safety and efficacy of pitolisant in adult patients with myotonic dystrophy type 1 (DM1).
HRMY Product Net Revenues increased 36.4% year-over-year to $160.27 million in the third quarter, ended September 30, 2023. at $0.64.
HRMY’s revenue is likely to increase 28.6% year-over-year to reach $153.17 million in the fiscal first quarter ended March 2024. Its EPS is expected to increase 39.2% year-on-year previous up to $0.67 in the same quarter. Plus, it beat revenue estimates in three of the trailing four quarters, which is impressive.
The stock gained 68.1% over the past three months to close the latest trading session at $32.27.
HRMY’s POWR Ratings reflect its strong outlook. The stock has an overall rating of B, which translates to Buy in our proprietary rating system.
HRMY also gets an A grade for value and quality. It is ranked 27th in the same industry.
To access additional ratings for HRMY growth, sentiment, stability and momentum, click here.
Action no. 1: Organogenesis Holdings Inc. (PROUD)
ORGO develops, manufactures and markets solutions for the advanced sectors of wound care, surgery and sports medicine. Its clientele includes hospitals, wound care centers, government facilities, outpatient service centers and physician offices, served through experienced direct sales representatives and independent agencies.
ORGO’s trailing 12-month EBIT margin of 5.02% is 829.3% higher than the industry average of 0.54%. Its trailing 12-month EBITDA margin of 8.11% is 59.3% higher than the industry average of 5.09%.
For the fiscal 2023 third quarter ended September 30, 2023, ORGO’s revenue from operations increased 352.5% year-over-year to $8.05 million. Its adjusted EBITDA grew 37.6% from a year ago to $15.97 million. The company’s adjusted net income increased 4.1% from the prior-year quarter to $5.30 million, while net earnings per share stood at $0.02.
As of September 30, 2023, ORGO’s total assets were $462.65 million, compared to $449.36 million as of December 31, 2022.
The consensus revenue estimate of $457.07 million for the fiscal year ending December 2024 indicates a year-over-year increase of 3.8%. The consensus EPS estimate of $0.05 for the current year reflects growth of 25% over the prior year. Additionally, the company has surpassed consensus EPS estimates in three of the trailing four quarters.
ORGO shares have gained 77.6% over the past nine months and 40% over the past year, closing the latest trading session at $3.64.
ORGO’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall rating of B, which translates to Buy in our proprietary rating system.
ORGO is graded A for Value and B for Quality. It is ranked 25th in the same industry.
Access ORGO’s growth, momentum, stability and sentiment ratings here.
What to do next?
Discover 10 widely held stocks that, according to our proprietary model, have enormous downside potential. Please make sure none of these”deadly trapStocks are lurking in your portfolio:
10 shares to SELL NOW! >
HRMY shares were unchanged in premarket trading Tuesday. Year to date, HRMY has fallen -0.09%, compared to a 3.36% rise in the benchmark S&P 500 index over the same period.
About the author: Kritika Sarmah
Her interest in risky instruments and passion for writing made Kritika a financial analyst and journalist. She holds a bachelor’s degree in commerce and is currently pursuing the CFA program. With her fundamental approach, she aims to help investors identify untapped investment opportunities.
Moreover…
The mail 4 biotech stocks with huge buying potential appeared first StockNews.com