The biotech sector has been through a lot in the past five years and it is finally rebounding. One of the most important sectors globally, it is hard to imagine life without biotech companies that provide life-changing drugs. With multiple clinical trials happening, getting FDA approvals and ensuring due diligence, these biotech companies have a lot to juggle. If you are a long-term investor, considering biotech stocks to buy for your portfolio can be a smart move.
The industry is never going to be out of demand. There will always be a product pipeline, more approvals and ongoing research to handle. Biotech stocks are bouncing back, and there is immense potential for the sector. If you can handle a little risk that comes with it, here are the three biotech stocks to keep your eyes on this month.
Biotech Stocks to Buy: Novo Nordisk (NVO)
One of the best biotech stocks to buy this month, Novo Nordisk (NYSE:NVO) has an impressive portfolio of drugs. It has seen massive demand for Wegovy, a hot Glucagon-like peptide 1 (GLP-1,) which has led to a rise in revenue.
It saw a 35% jump in sales for Wegovy, which helps reduce the risk of cardiovascular conditions in obese people. Novo Nordisk already has more than 25,000 people taking the brand each week in the quarter.
Novo Nordisk was already known for its obesity drugs, and it saw a 28% jump in the net profit to hit $25.4 billion in the first quarter. Following a successful quarter, management raised its outlook for the year and is aiming for sales growth between 19% and 27%.
Up 37% year-to-date (YTD), NVO stock is exchanging hands for $139 and has soared over 450% over the past five years. The stock has been steadily moving upward since last year and has set a solid momentum for 2024. NVO is one of the best biotech stocks to buy.
Besides being an established player in the industry, Novo Nordisk will continue seeing higher profits from the GLP-1 drug. It sets itself apart from the competition through this highly successful drug, which has made NVO a hot investment today. Its long-term growth opportunities are massive.
Moderna (MRNA)
Moderna (NASDAQ:MRNA) achieved fame during the pandemic, but the highs of 2021 have subdued, and the stock is down to $145 today. It was trading as high as $449 in 2021. This pullback was inevitable, and all vaccine makers have gone through it. However, Moderna is much more than the vaccine, and despite the pullback, analysts are bullish on the stock. It is up 45% YTD and is on a steady upward rally.
The company is already testing a vaccine for avian flu in humans and has 45 drugs in the pipeline, many are already in the final-stage trials. It also has a combination shot for the flu and COVID-19, which could be approved next year.
Moderna’s fundamentals have suffered post-pandemic, with revenue at $167 million and a loss per share of $3.07. It has seen a steady revenue decline due to a drop in the demand for COVID shots, and the management is expecting sales of $4 billion for the full year.
It hopes to return to sales growth next year and break even by 2026. Moderna has seen its net income fall significantly over the past few years but has a chunky pipeline that can help the company bounce back.
AbbVie (ABBV)
Up 5% YTD and 18% in the past 12 months, AbbVie (NYSE:ABBV) stock has pulled back since April and seen most of its gains drop. The biotech company is fighting stiff competition in the industry, and I think the dip is a good chance to buy. The stock is exchanging hands for $162 and looks undervalued right now.
The company has a diverse pipeline and blockbuster products that keep generating revenue. It recently entered into a partnership with Gilgamesh Pharmaceuticals. Both companies will work on psychiatric therapy, and with the psychiatry market seeing tremendous growth, the demand for therapy will increase.
AbbVie already has a neuroscience segment. With the addition of this therapy, the company will expand its umbrella. The neuroscience portfolio saw a 13.9% revenue jump in the first quarter.
With over 90 compounds, devices or indications in the pipeline, AbbVie has a lot more to come. Investors must remember that the company is so much more than Humira. While it has seen a drop in Humira revenue, it has also seen an improved performance in other drugs, including Rinvoq, which saw a 59% jump in sales.
AbbVie is an ideal stock for passive income investors. It has increased dividends for over 50 years and enjoys a yield of 3.82%.
On the date of publication, Vandita Jadeja 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.
