These biotech stocks have so far brightened in 2022
Known as one of the most volatile sectors in the biotechnology market, it is interesting to note that certain stocks in that area show a lot of relative strength during the volatile first few months of the year. Investors should note that it is especially important to choose carefully when adding exposure to this area of the market, as one of the many successes and failures of these companies is far from FDA approval. One of the best ways to take advantage of the upside that biotech stocks offer is to narrow your focus to companies that have a strong pipeline of promising new drugs and an existing line of successful drugs that help keep businesses financially stable.
Some of the names that fit this description were one of the biggest outperformers in the market to start the year, which tells us a lot about what organizations and big investors are interested in buying in an indefinite period of time for both the economy and the market. These current winners certainly have a better chance of continuing the higher trend, especially thanks to their low exposure to geopolitical risks and approval for a new blockbuster drug, Sky-High. That’s why we’ve put together a brief overview of the 2 biotech stocks that are showing serious relative strength to help you distinguish the most intriguing names in the sector for the time being.
Let’s take a deeper look below.
The first is AbbVie, a highly lucrative biotech stock that has grown more than 20% year-over-year and continues to trend nicely. It is an interesting research-based biopharmaceutical company for a variety of reasons, including a very consistent history of dividend growth. In fact, AbbVie is a dividend king, which means the company has increased its payouts for 50 years in a row. The stock offers a 3.48% dividend yield and investors can probably rely on the company to create enough cash flow to support the dividend for next year. This kind of continuity and reliability is not easy to find these days, which is probably one of the reasons why stocks have rallied.
It is noteworthy that AbbVie’s main drug Humira, which is used to treat rheumatoid arthritis and is the company’s largest product in terms of revenue, will face a lot of biosimilar competition in 2023. With that said, AbbVie is focused on creating new drugs that can drive cars. Growth and diversification of its product base for the long term. Oncology drugs such as Venklexta and Imbruvika are good examples, along with immunological drugs such as Skyriji and Rinvok. The company also acquired Botox-maker Allergan in 2020, which will lead to stronger organizational integration and a more diversified revenue base for AbbVie in the long run, making it a highly attractive alternative in the biopharma space.
Vertex Pharmaceuticals (NASDAQ: VRTX)
Cystic fibrosis is one of the most common and most serious genetic diseases in America, which is a big reason why Vertex Pharmaceuticals has left a simple company behind. It is a biotechnology company that focuses on the development and commercialization of therapy specifically for the treatment of cystic fibrosis. Shares of this biotech stock have recently reached new all-time highs and are currently above 22% per annum, a stronger outperformance than the 2022 S&P 500. Due to the company’s dominant position, Vertex is attractive for CF drugs, as it has limited competition in that area and about 90% of the CF population deserves to be treated with drugs like Kalydeco, Orkambi, Symdeko, and Trikafta.
It is also noteworthy that Vertex has initially discovered many of its new drug candidates, pointing to the potential for future successful drugs in the company’s pipeline. Vertex’s revenue grew 22% year-over-year in 2021, and with exciting new gene-editing candidates who are in Phase 3 trials, the company could be on the verge of further growth. The bottom line is that Vertex Pharmaceuticals has been one of the strongest stocks on the market for the past few weeks, and for good reason. Investors looking for exposure to this curious company may want to consider adding pullback shares in the next session.