Biotech is one of the most exciting industries to invest in right now. Companies have drugs on the market worth billions and continue to strive to produce the newest and best treatments in modern medicine. Some biotech companies can face volatility as their popularity largely depends on pipeline updates. But some have proven more resilient than others.
These three biotech stocks are some of the sector’s most consistently performing stocks. They produce medicines in both the pharma and biotech classes. Despite their exciting growth potential and undeniable rewards, investors have been selling these stocks, causing a slight dip in price. However, this dip is a golden opportunity for those who can wait.
We’ll detail these stocks’ most recent performances and earnings, best sellers and products coming down the pipeline, and the plans setting them up for great things this year.
Pfizer (PFE)
Pfizer (NYSE:PFE) is a giant in biopharma, offering unique treatments and medicines that use biotech. It has been a top blue-chip stock with a tremendous dividend yield and an excellent upward growth trend. However, over the last year, the stock has seen a drop in price after many investors made the rash decision to sell shares.
Also, Pfizer has maintained a consistent dividend yield that far exceeds the market average. Currently, with a yield of 5.88%, PFE ranks in the highest class of stocks for sending money back to investors.
The current dip is due to many investors selling Pfizer shares after revenue decreased in the first quarter of this year. A 19% decrease can be scary for some. However, looking at the stock’s history, there is little doubt that Pfizer will turn things around.
Already, Pfizer has begun making strides in this direction, declaring a $4 billion cost-cut plan to be fully implemented by the end of 2024. Such a significant cut will result in a much more favorable operating margin. As a result, the company has raised guidance for adjusted EPS by 10 cents this year.
Given Pfizer’s proven track record, investors have little to fear and should buy this solid dividend stock while the valuation is so cheap.
AbbVie (ABBV)
A leader in biopharma, AbbVie (NYSE:ABBV) has several best-selling products within its sector. Yet, AbbVie has recently ventured into biotech in a big way following a deal with biotech giant Gilgamesh Pharmaceuticals. Indeed, it mean even more enormous profits for AbbVie.
The collaboration with Gilgamesh involves the two companies working on a psychiatric therapy meant to increase neuroplasticity in patients. The treatment will pinpoint and utilize the positive effects of psychedelic drugs on neuroplasticity without the hallucinations and sensory impact.
While AbbVie has a neuroscience department, its treatments for psychiatric disorders are lacking. With the addition of the neuroplasticity therapy, AbbVie could see major gains after paying out Gilgamesh the money promised in the deal. The psychiatry market and treatments are on track to grow tremendously, creating a strong demand for such a therapy.
The therapy is new and could take a long time to be approved and implemented in AbbVie’s offerings. However, the company has several other significant products on the market and has acquired others, such as ImmunoGen, which produces cancer therapy Elahere.
The diverse pipeline and investments in future growth mean AbbVie has a lot to offer investors. Therefore, the recent dip in price makes now a better time to get on board.
Eli Lilly (LLY)
Eli Lilly (NYSE:LLY) is a leader in healthcare and excels in providing a diverse range of biotech and pharmaceutical treatments. The stock has been a top buy for investors for a long time as the company boasts excellent financials and has continued to demonstrate its ability to sustain growth.
In the first quarter, Eli Lilly reported a 26% increase in revenue and a 66% increase in EPS. Guidance for this year also jumped up $2 billion. This immaculate quarter and increased expectations came from exciting progression in clinical trials for several treatments Eli Lilly is developing. Those drugs include tirzepatide, mirikizumab and lebrikizumab.
Moreover, Eli Lilly’s medicines are in high demand as they mainly target health conditions such as obesity and diabetes. With such high populations of affected people worldwide, the demand for these treatments is never scarce.
Add this phenomenal potential to a rock-solid top line and years of expected future growth, and you have one of the best stocks on the market. The price is not cheap in comparison, but the current dip is worth a serious look.
On the date of publication, Joel Lim did not have (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.
