Biotech stocks to buy can be an interesting sector for investors. They can provide massive gains following positive news regarding clinical trials or FDA approvals. However, they may also cause large share price drops following bad news or missed expectations surrounding a company’s treatments.
In my opinion, when investing in the biotech industry, it’s best to steer clear of smaller companies that are more susceptible to wild swings in their share price. It is much better to stick with larger companies that offer a wide array of treatments and increased growth potential.
When choosing which biotech stocks to buy right now, I settled on companies that have experienced strong share price appreciation over this past year and a fair valuation, with a low forward P/E ratio compared to the sector overall.
United Therapeutics (UTHR)
United Therapeutics (NASDAQ:UTHR) manufactures and commercializes treatments for life-threatening diseases primarily related to the lungs, such as pulmonary hypertension. Its products include Tyvaso, Remodulin, Adcirca, and Orenitram.
Over the past year, its share price has increased by 40%, primarily due to its first-quarter earnings beat.
On May 1, United Therapeutics reported earnings for the first quarter of 2024, stating that total revenue increased by 34% and net income rose by 27% compared to the previous year. Four of its flagship treatments reported double-digit sales growth year over year.
UTHR is trading at a fair valuation, with a forward P/E ratio of 12.73, compared to the median sector forward P/E ratio of 19.61.
UTHR offers investors upside potential due to its strong sales growth among many of its treatments.
Halozyme Therapeutics (HALO)
Halozyme Therapeutics (NASDAQ:HALO) operates a healthcare tech platform that provides subcutaneous drug delivery solutions along with other commercialized products related to proprietary enzymes.
On May 7, Halozyme reported earnings for the first quarter of 2024, stating that total revenue increased by 21% and net income rose by 94%. It also announced a share buyback program with a limit of $750 million in repurchases.
In June, HALO updated its full-year guidance for 2024, stating that expected total revenue is between $935 million and $1,015 million. This update in guidance comes after the patent approval regarding its product Enhanze.
Halozyme is trading at a forward P/E ratio of 13.34, while the sector average is 19.61.
HALO would be a great addition to an investment portfolio. It offers growth potential, especially following the recent patent approval and raised guidance.
Amgen (AMGN)
Amgen (NASDAQ:AMGN) is a therapeutics manufacturer with products such as Enbrel, Otezla, Prolia, Xgeva, and Repatha, which treat a number of issues such as psoriasis, heart attack prevention, and osteoporosis. It also collaborates with other healthcare companies to develop and commercialize treatments.
Over this past year, its share price has risen by 47%, partly due to its strong first-quarter earnings report.
On May 2, Amgen reported its earnings for the first quarter of 2024. It stated that total revenue increased by 22%, several of its products reported year-over-year sales growth above double-digits, and its net income remained practically unchanged compared to the year before.
Its stock price surged by roughly 12% following its first-quarter earnings report in which it confirmed positive data about its potential weight loss drug MariTide.
Amgen has reported decent sales growth among several treatments, and total revenue for the full year 2024 is expected to be between $32. 5 billion and $33.8 billion. It is a solid choice for investors; it is a robust biotech stock that can offer investors increased returns, especially over the long term.
Amgen is also trading at a decent valuation. Its forward P/E ratio is 16.97, while the sector average is 19.61.
On the date of publication, the responsible editor did not have (either directly or indirectly) any positions in the securities mentioned in this article.
As of this writing, Noah Bolton did not hold (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.