The biotech industry is expected to witness solid growth driven by growing government initiatives and increasing demand across several sectors. While we think fundamentally sound biotech stocks Gilead Sciences (GILD) and United Therapeutics (UTHR) could be solid buys this year, Bionano Genomics (BNGO) could be best avoided considering its fundamental weakness and bleak growth prospects. Keep reading….
Last year, the Biden administration unveiled a plan to spend more than $2 billion in the biotechnology sector in the United States. Additionally, the growing popularity of organic food products mandates the use of biotechnology in agriculture, which will drive revenue growth in the industry.
Also, the U.S. Department of Energy (DOE) is dedicated to enhancing American lives through biotechnology and biomanufacturing. In a significant effort to take advantage of the rapid advancements in biotechnology, DOE programmes are investing heavily in the commercialization of scientific discoveries.
Furthermore, according to the Business research company, the global biotechnology market is expected to grow at a CAGR of 10.2% until 2027. Investors’ interest in biotech stocks is evident from the SPDR Series Trust SPDR S&P Biotech ETF’s (XBI) 5.8% gains over three months and 7.6% gains over the past six months.
Given the industry’s growth prospects, fundamentally sound biotech stocks Gilead Sciences (GILD), United Therapeutics (UTHR) could be solid buys this year. However, given Bionano Genomics, Inc. (BNGO) fundamental weakness and bleak growth prospects, the stock might be best avoided now.
Stocks to Buy:
Gilead Sciences, Inc. (GILD)
Biopharmaceutical company GILD discovers, develops, and commercializes medicines in the areas of unmet medical need in the United States, Europe, and internationally for over three decades.
On January 3, 2022, GILD announced that the European Medicines Agency (EMA) had approved the Marketing Authorization Application (MAA) for Trodelvy to treat adult patients with previously-treated HR+/HER2-metastatic breast cancer. This is anticipated to help expand patient access to Trodelvy throughout the EU.
In terms of forward EV/EBITDA, GILD is trading at 8.89x, 34% lower than the industry average of 13.46x. Its forward EV/EBIT of 10.09x is 43.3% lower than the industry average of 17.77x.
GILD’s trailing-12-month gross profit margin of 79.22% is 43.4% higher than the 55.24% industry average. Its trailing-12-month net income margin of 12.29% compares with the negative 5.84% industry average.
GILD’s trodelvy’s sales came in at $180 million for the third quarter that ended September 30, 2022, up 78.2% year-over-year. The company’s current liabilities came in at $10.42 billion for the period ended September 30, 2022, compared to $11.61 billion for the period ended December 31, 2021.
GILD’s EPS is expected to increase marginally per annum for the next five years. It surpassed EPS estimates in three of the four trailing quarters. Over the past nine months, the stock has gained 36% to close the last trading session at $83.74.
GILD’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall A rating, equating to a Strong Buy in our proprietary rating system. The POWR Ratings assess stocks by 118 different factors, each with its own weighting.
GILD has an A grade for Value and a B for Sentiment and Quality. Within the Biotech industry, it is ranked #4 out of 396 stocks. Beyond what is stated above, we’ve also rated GILD for Growth, Momentum, and Stability. Get all GILD ratings here.
United Therapeutics Corporation (UTHR)
UTHR develops and commercializes medicines to meet the unmet medical needs of people with chronic and life-threatening diseases worldwide. It also markets and sells technologies to supply transplantable organs and tissues and improve transplant outcomes for recipients.
On November 2, 2022, Martine Rothblatt, Ph.D., Chairperson, and CEO, said, “We are thrilled to report the highest quarterly revenue in our history. On top of our historic performance, we continue to innovate with the recent launch of the pivotal TETON 2 study of Tyvaso in idiopathic pulmonary fibrosis, which adds to the four other registration studies we have underway.”
In terms of forward EV/EBITDA, UTHR is currently trading at 7.65x, 43.6% lower than the industry average of 13.55x. Its forward EV/EBIT of 7.95x is 56% lower than the industry average of 18.06x.
UTHR’s trailing-12-month gross profit margin of 93.15% is 68.6% higher than the 55.24% industry average. Its trailing-12-month EBITDA margin of 55.43% is substantially higher than the 3.55% industry average.
UTHR’s revenues came in at $516 million for the third quarter ended September 30, 2022, up 16% year-over-year. Its net profit came in at $239.30 million, up 47.1% year-over-year, while its EPS came in at $4.91, up 43.6% year-over-year.
Street expects UTHR’s revenue to increase by 12.7% year-over-year to $2.22 billion in 2023. Its EPS is expected to grow 15.3% year-over-year to $19.44 in the current year. It surpassed EPS estimates in three out of four trailing quarters. The stock has gained 37.5% over the past nine months to close the last trading session at $259.56.
It’s no surprise that UTHR has an overall A rating, equating to a Strong Buy in our POWR Ratings system. It has a B grade for Growth, Value, and Quality. UTHR is ranked first in the same industry. Click here for the additional POWR Ratings for UTHR (Stability, Sentiment, and Momentum).
Stock to Avoid:
Bionano Genomics, Inc. (BNGO)
BNGO provides genome analysis software solutions. It offers Saphyr, Saphyr instruments, Saphyr Chip, Bionano Prep Kits, and DNA labeling kits.
BNGO’s forward EV/Sales of 13.51x is 224.1% higher than the industry average of 4.17x. Its forward Price/Sales of 19.65x is 320.7% higher than the industry average of 4.67x.
BNGO’s trailing-12-month gross profit margin of 16.91% is 69.4% lower than the industry average of 55.24%. Its trailing-12-month levered FCF margin of negative 218.05% is substantially lower than the negative industry average of 2.44%.
BNGO’s loss from operations came in at $32.15 million for the third quarter ended September 30, 2022, up 55.5% year-over-year. Moreover, its net loss came in at $31.81 million, up 53.3% year-over-year.
BNGO’s EPS is expected to fall 69.2% year-over-year to negative $0.44 in 2023. BNGO’S shares have lost 22.1% over the past year to close the last trading session at $1.83.
BNGO’s POWR Ratings reflect this bleak outlook. The stock has an overall F rating, equating to a Strong Sell in our proprietary rating system. It also has an F grade for Stability and Quality and a D for Growth, Value, Momentum, and Sentiment. BNGO is ranked last in the same industry. Get all BNGO ratings here.
GILD shares fell $0.19 (-0.23%) in premarket trading Thursday. Year-to-date, GILD has declined -2.46%, versus a 2.37% rise in the benchmark S&P 500 index during the same period.
About the Author: RashmiKumari
Rashmi is passionate about capital markets, wealth management, and financial regulatory issues, which led her to pursue a career as an investment analyst. With a master’s degree in commerce, she aspires to make complex financial matters understandable for individual investors and help them make appropriate investment decisions.
The post 2 Biotech Stocks to Buy up in 2023 and 1 to Avoid Like the Plague appeared first on StockNews.com
Your Company’s Responsible Guide to Staying Profitable in a Recession
Opinions expressed by Entrepreneur contributors are their own.
The recent trend of easy money and exorbitant valuations has skidded to a halt amid recent economic volatility. Understandably, many companies rode that wave as long as they could, but in doing so many prioritized growth over sustainability and sound leadership. Layoffs continue to ripple through the tech ecosystem, so employees both in this sector and elsewhere are feeling the consequences.
Having to let go of staff members is all but unavoidable in a company’s lifecycle, but there is always more that can be done to keep businesses afloat while preserving morale. Strategies can include responsible budgetary decision-making, thoughtful and prudent responses to external pressures and transparent dialogue with employees, to name a few. Such actions can help companies remain healthy, productive and profitable, even as they navigate challenging waters.
This is What You Need in Your 5-Year Marketing Plan
Opinions expressed by Entrepreneur contributors are their own.
We’ve all heard the interview question, “Where do you see yourself in five years?” Marketers routinely take that question and apply it to their marketing strategies. They figure out what they want to achieve and then develop actionable steps to get there. Keep in mind, these plans aren’t designed to be all-encompassing. They serve as a guidebook for different scenarios while getting the team thinking about what they’d like to accomplish long-term.
Your five-year plan is a way to build an overarching metric for how you’re doing — or how you plan to do over the next half-decade. There are many things to consider when building your plan — here are a few to look at carefully:
The 3 key buckets
A successful five-year marketing plan should fixate on three main questions:
- What assumptions can you make about the next five years within your company?
- What goals do you want to achieve?
- What are the metrics you’ll use to measure those goals?
Assumptions are what you think won’t change in the business over the next five years. For example, you might assume that you will continue using particular vendors or that packaging costs will remain stable. From there, you can determine your goals — like boosting sales by 50% or converting 10,000 new customers. The metrics that measure your progress might be units sold or your company’s market share. It’s essential to include both readily-accessible metrics — such as website views — and brand metrics that might be a bit harder to come by, such as the associations your customers have made with your products or company.
Importantly, there’s no “right” or “wrong” when it comes to answering these questions. Every business has its own vision, resources and position, which all influence its marketing strategy. The aim is to develop a plan that will produce the most desirable outcome for you, rather than worrying about what other businesses have the capacity to do.
Related: Use These 5 Steps to Create a Marketing Plan
Narrowing your focus
Just like consumer preferences, marketing tactics are constantly shifting. Social media demonstrates this well. Because social media platforms have skyrocketed over the past two decades, marketers no longer rely solely on traditional platforms such as print or television ads. And even within social media, things aren’t constant. TikTok has become one of the fastest-growing platforms, quickly overtaking Facebook.
With so many options, your marketing plan must keep a narrow focus. For some companies, TikTok doesn’t matter. They can’t yet measure the return they’re getting from the platform, so this isn’t exactly a feasible opportunity. Don’t be tempted to try everything or be everywhere. It’s a matter of isolating what you practically can use to give you the insights that will help you.
Two questions will help focus your strategy:
- How do your goals compare to last year?
- What are you striving for (e.g., enhancing the brand vs. increasing brand awareness)?
How you answer those questions will help you identify where and how to focus your efforts so you don’t get lost in a bunch of small, irrelevant tactics.
Using your budget
Most people think of budgets as being stable or hard data — but almost all companies work with unknowns. In reality, the best they can do is come up with an educated guess that seems to make sense – a ballpark range. Because nobody can plan with certainty for every scenario — and because it’s so easy to become overwhelmed with an infinite range of outcomes — it’s advisable to lean on a few key financial assumptions and build a strategy around those.
Once you have a budget figure to work with, create high and low projections for everything you want to do. Let’s say the aim is to get to 50% brand awareness. What would your plan look like if you exceeded that and got to 75%? Alternatively, what would you do if awareness went down to 25%? Creating these high and low projections will let you design a more flexible approach and avoid being caught too off guard.
As you come up with your main scenarios and high-low projections, think about the key internal drivers you’ll need to address next year. Consider the risks, and assess whether you’ll have the data, technology and skills to develop and maintain what you expect to put forward. Keep in mind that it’s more important to pivot when issues come up than to predict what’s going to happen accurately.
Related: 4 Tips for Developing a Marketing Plan That Will Actually Grow Your Business
Paint flexibly within your broad strokes
A five-year marketing plan paints a broad, long-term picture of how you’ll communicate with your audience while giving details about your projected products or services. It includes assumptions and factors that aren’t necessarily static, so you have to approach it with a grain of salt and be ready to shift gears if the plan doesn’t work.
Even so, if you stick to three key buckets (assumptions, goals and metrics), keep your tactical focus narrow and incorporate multiple projections in your budget, you should end up with a strategy that blends the data and flexibility needed to strive in a changing world. Because annual marketing plans need to connect to your long-term marketing vision, let the annual marketing meetings serve as check-in points to keep your longer-term marketing plan relevant and viable.
Lauren Sánchez Is Heading to Space on a Girls Trip
Sorry, Jeff — this one is for the girls.
Jeff Bezos’ girlfriend, Lauren Sánchez, said in a new interview with the Wall Street Journal that she planned to take an all-female trip to space with the Amazon founder’s space manufacturing company, Blue Origin.
Five women will join her on the journey.
“It’s going to be women who are making a difference in the world and who are impactful and have a message to send,” she told the outlet.
The mission is set for early 2024, and the passengers’ names will be announced at a later date.
The WSJ’s report was Sánchez’s first solo interview, the outlet noted, since her relationship with Bezos went public in 2019, shortly after his divorce announcement from now ex-wife, MacKenzie Scott.
The interview also talks about Sánchez’s relationship with Bezos and the business advice he’s given her (keeping meetings under an hour, speaking last as a boss).
Sánchez is a former broadcast journalist and a helicopter pilot who founded her own filming company Black Ops Aviation, per Insider.
“Right now, I’m immersing myself in philanthropy and strategic giving,” she told the outlet. She also has a new production company, Adventure & Fellowship.
Bezos and Sánchez also work together on picking the winner for the Bezos Award for Courage & Civility, which was awarded to Dolly Parton in 2022, giving her $100 million to dole out to charities as she pleased.
But don’t expect Bezos to crash the girls’ trip. “He’ll be cheering us all on from the sidelines,” Sánchez said, adding that Bezos is “excited to make this happen with all of these women… He’s very encouraging and excited, and he’s thrilled we’re putting this group together.”
Sánchez’s nonprofit work includes This Is About Humanity, which helps give supplies to kids separated from their parents at the U.S.-Mexico border, supporting the Bezos Earth Fund, which fights climate change, and working with the Bezos Academy, a system of free Montessori schools.
Bezos told CNN in an exclusive that aired in mid-November that, like many other billionaires have pledged to do, he would give away most of his money.
Ex-wife Scott, meanwhile, has donated over $14 billion since 2019, much of it coming from the settlement with Bezos.
Bezos has always planned on giving his money away, Sánchez told the outlet.
“Jeff has always told me since I’ve known him that he’s going to give the majority of his money to philanthropy,” she said.
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