Biotech stocks are among the most coveted stocks during the pandemic, due to their potential to gain significantly in a short span of time through development of an effective vaccine. However, the healthcare industry is facing multiple challenges in addition to the pandemic, including a rising number of cancer patients with each passing day. The American Cancer Society expected…
at least 1.80 million new cancer cases in 2020. The sedentary lifestyle under the new normal of working and learning from home is expected to put a larger group of people at risk of cancer.
Medical advancements in the field of drug development has increased the recovery rate significantly over the past couple of years. Many biotech companies such as Amgen Inc. (AMGN), Genmab A/S (GMAB), Seattle Genetics, Inc. (SGEN) and Alexion Pharmaceuticals (ALXN) are working towards introducing new cancer drugs, as well as improving the efficacy of current medications. AMGN, in collaboration with Adaptive Biotechnologies (ADPT), is also involved in developing fully human neutralizing antibodies targeting SARS-CoV-2 to potentially prevent or treat COVID-19 infection.
As the threat of cancer cannot be eradicated overnight, these drugs are expected to drive the revenue and earnings of the above-mentioned companies for the long haul, thereby acting as a profitable bet for investors.
AMGN develops human therapeutic medication for the treatment of cardiovascular, oncology and neuroscience related diseases. Its supply chain comprises wholesale distributors and direct-to-consumer channels. It has recently been included in the Dow Jones Industrial Average.
On September 17th, AMGN entered into a global antibody manufacturing collaboration with Eli Lilly and Company (LLY) to significantly increase the supply capacity available for Lilly’s potential COVID-19 therapies. This would allow the two companies to generate profits from scaled up production and supply. AMGN has also shown significant progress in its ongoing clinical trials for refractory melanoma and lung carcinoma.
AMGN reported a 6% year-over-year increase in total revenues to $6.20 billion in the second quarter that ended June 2020. Non-GAAP EPS increased 7% from the year-ago value to $4.25, while non-GAAP operating income rose 9% from the same period last year to $3.20 billion.
The consensus EPS estimate of $3.80 for the third quarter ending September 2020 indicates a 3.8% rise year-over-year. Moreover, AMGN has an impressive earnings surprise history, as it beat the street EPS estimates in each of the trailing four quarters. The consensus revenue estimate of $6.35 billion for the upcoming quarter indicates a 10.7% rise from the same period last year.
AMGN has gained more than 45% since hitting its 52-week low of $177.05 in March. The stock hit its 52-week high of $264.97 in June.
How does AMGN stack up for the POWR Ratings?
A for Trade Grade
A for Buy & Hold Grade
A for Peer Grade
A for Overall POWR Rating.
It is also ranked #1 out of 376 stocks in the Biotech industry.
Alexion Pharmaceuticals (ALXN)
ALXN is a biopharmaceutical company commercially engaged in the production of therapeutic products. On September 21st, it received a positive opinion and marketing recommendation from CHMP and European Union respectively, for its product Ultomirisis. The drug also received approval from Japan’s Ministry of Health and Labor and Welfare.
ALXN also partnered with…
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