The biotech industry is currently seeing a heightened demand for high-quality healthcare, innovative treatments, and advanced solutions, largely due to an aging population and escalating healthcare requirements. Given its rapid pace of innovation and promising growth potential, investing in select biotech stocks could be wise.
Amid this backdrop, fundamentally robust biotech stocks such as Fulcrum Therapeutics, Inc. (FULC), BioCryst Pharmaceuticals, Inc. (BCRX), and Precision BioSciences, Inc. (DTIL) could offer significant return potential owing to their dominance in high-demand areas and transformative treatments.
The biotechnology industry is experiencing rapid growth due to rising demands for personalized medicine, tailored treatments, and the approval of new drugs by the Food and Drug Administration (FDA).
This trend is highlighted in a survey conducted by GlobalData, which reveals that 44% of healthcare industry professionals globally are optimistic or extremely optimistic about the recovery of biotech funding in the next twelve months.
Incorporating Generative AI (GenAI) into biotechnology subjects is also revolutionizing the industry by enabling companies to derive valuable consumer insights, craft precise marketing strategies, and redefine healthcare engagements.
According to the McKinsey Global Institute, the integration of GenAI is anticipated to contribute an annual economic value of $60 billion to $110 billion for pharmaceutical and medtech firms.
Furthermore, according to a report by Precedence Research, the U.S. biotechnology market was valued at $246.18 billion in 2023 and is expected to expand at a CAGR of 11.6%, reaching approximately $830.31 trillion by 2034.
Considering these factors, let’s discuss the fundamentals of three high-potential Biotech stocks under $10, starting with #3.
Stock #3: Fulcrum Therapeutics, Inc. (FULC)
FULC is a clinical-stage biopharmaceutical company focused on treating genetically defined rare diseases. Its clinical product candidates, losmapimod and FTX-6058, are developed for facioscapulohumeral muscular dystrophy (FSHD) and sickle cell disease (SCD), respectively.
On May 13, FULC announced its collaboration and license agreement with Sanofi (SNY) for the development and commercialization of losmapimod, for the treatment of FSHD. SNY obtains exclusive commercialization rights for losmapimod outside of the United States under the agreement.
With the help of SNY’s global reach, it could become easier for FULC to expand its pipeline and grab a stronger market presence in the FSHD treatment zone.
For the fiscal 2024 second quarter that ended on June 30, 2024, FULC’s collaboration revenue increased significantly year-over-year to $80 million. The company’s income from operations came in at $52.49 million, compared to a loss of $27.29 million in the previous year's quarter.
Also, its net income and net income per share were reported to be $55.41 million and $0.87, compared to a net loss and net loss per share of $23.78 million and $0.38, respectively.
Analysts expect FULC’s revenue to increase 707.3% year-over-year to $7.03 million for the fiscal fourth quarter ending December 2024. Meanwhile, the consensus revenue estimate of $86.56 million for the fiscal year ending December 2024 reflects a significant year-over-year rise.
FULC’s stock has gained 30.2% over the past three months and 96.4% over the past nine months to close the last trading session at $9.39.
FULC’s bright outlook is reflected in its POWR Ratings. The stock has an overall rating of B, which translates to a Buy in our proprietary rating system. The POWR Ratings are calculated by considering 118 different factors, each weighted to an optimal degree.
FULC has a B grade for Value and Quality. It is ranked #26 among 341 stocks in the Biotech industry.
Click here to access FULC’s ratings for Growth, Stability, Momentum, and Sentiment.
Stock #2: BioCryst Pharmaceuticals, Inc. (BCRX)
BCRX is a biotechnology company that develops oral small-molecule and protein therapeutics for rare diseases. Its products include ORLADEYO for hereditary angioedema prevention and RAPIVAB for acute uncomplicated influenza treatment in the United States.
On July 9, BCRX announced that its oral, once-daily medication ORLADEYO® received approval from the General Directorate of Medicines, Supplies, and Drugs (DIGEMID) in Peru. The approval allows ORLADEYO® to be used for the prophylaxis of hereditary angioedema (HAE) attacks in adults and pediatric patients aged 12 and older.
Moreover, the approval in Peru adds to BCRX’s established presence in the pan-Latin America region, following previous approvals in Chile, Argentina, Brazil, and Mexico. It signifies a significant milestone for BCRX, expanding its market and potentially attracting more customers seeking treatment for HAE.
BCRX’s total revenues increased 32.5% year-over-year to $109.33 million for the fiscal 2024 second quarter that ended June 30, 2024. Its adjusted income from operations also increased to $21.93 million compared to a loss of $7.86 million in the previous year’s quarter.
In addition, as of June 30, 2024, BCRX’s cash, cash equivalents and investments amounted to $336.34 million while total assets came in at $472.42 million.
BCRX’s consensus revenue estimate of $113.89 million for the fiscal third quarter ending September 2024 reflects a year-over-year increase of 31.3%. Also, for the fiscal fourth quarter ending December 2024, BCRX’s revenue is expected to increase by 26% from the prior year to $117.67 million.
In addition, BCRX has topped the consensus revenue estimates in all of the trailing four quarters, which is impressive.
Shares of BCRX have surged 31.3% in the past three months and 45.8% in the past nine months to close the last trading session at $8.05.
BCRX’s robust outlook is reflected in its POWR Ratings. The stock has an overall rating of B, translating to Buy in our proprietary rating system.
BCRX has a B grade for Growth, Sentiment, Value, and Quality. It has ranked #17 out of 341 stocks in the Biotech industry.
Click here to access BCRX’s ratings for Stability and Momentum.
Stock #1: Precision BioSciences, Inc. (DTIL)
DTIL is an innovative gene editing company specializing in developing in vivo therapies for genetic and infectious diseases using its proprietary ARCUS genome editing platform. The company's focus is on advancing gene edits and transformative treatments within these critical medical fields.
On August 9, DTIL announced U.S. Food and Drug Administration’s (FDA) approval for its partner TG Therapeutics, Inc. (TGTX) to commence Phase I clinical trial of Azercabtagene Zapreleucel (azer-cel) for its Investigational New Drug (IND) Application for progressive forms of multiple sclerosis (MS).
As the company receives approvals for its drugs in the auto-immune disease treatment market, it ensures a stronger market presence and presents better growth prospects.
On July 1, DTIL announced its addition to the Russell Microcap® Index, a key benchmark utilized by investment managers and institutional investors for index funds. The inclusion could lead to heightened visibility globally, attracting potential investors and fostering further growth opportunities for the company.
For the fiscal 2024 second quarter that ended June 30, DTIL’s revenue increased 152.2% year-over-year to $49.90 million. Its operating income amounted to $24.15 million compared to a loss of $3.13 million in the previous year’s quarter.
Additionally, the company’s net income and net income per share came out to be $32.75 million and $4.67 compared to a net loss and loss per share of $11.89 million and $3.13, respectively.
Analysts project DTIL to achieve $57.40 million in revenue for the fiscal year ending December 2024, reflecting a 17.8% year-over-year increase. Additionally, the company is expected to report an EPS of $2.10 for the period. Notably, DTIL has exceeded consensus revenue estimates in three of its last four quarters.
DTIL’s shares marginally declined intra-day close the last trading session at $9.85.
The stock’s positive fundamentals are reflected in its POWR Ratings. DTIL has an overall rating of B, which equates to a Buy in our proprietary rating system.
DTIL has an A grade for Sentiment and a B grade for Value. It is ranked #16 out of 341 stocks within the same industry.
Click here to access DTIL’s ratings for Stability, Quality, Growth, and Momentum.
What To Do Next?
43 year investment veteran, Steve Reitmeister, has just released his 2024 market outlook along with trading plan and top 11 picks for the year ahead.
BCRX shares were trading at $8.05 per share on Tuesday morning, down $0.18 (-2.19%). Year-to-date, BCRX has gained 34.39%, versus a 18.97% rise in the benchmark S&P 500 index during the same period.
About the Author: Aanchal Sugandh
Aanchal's passion for financial markets drives her work as an investment analyst and journalist. She earned her bachelor's degree in finance and is pursuing the CFA program. She is proficient at assessing the long-term prospects of stocks with her fundamental analysis skills. Her goal is to help investors build portfolios with sustainable returns.
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