The biotech sector holds allure for numerous reasons. Leading biotech firms pioneer groundbreaking therapies that save lives, representing a business that remains indispensable until a universal cure for all illnesses is discovered. Moreover, biotech companies tend to exhibit robust financial performance even during economic downturns, as their products are deemed essential.
However, not all biotech firms warrant investment consideration. Let’s explore two companies that are worth buying this month, as well as in the majority of months: Amgen (NASDAQ: AMGN) and Sarepta Therapeutics (NASDAQ: SRPT).
1. Amgen
Amgen has faced challenges over the past few years, with sluggish revenue growth, regulatory setbacks, and new medicines falling short of expectations. The launch of Amjevita, a biosimilar for Humira, failed to significantly impact the company’s total revenue, despite Humira’s peak annual sales of $21.2 billion.
However, counting out Amgen would be premature. As one of the largest biotech firms, it possesses a vast pipeline that holds promise for significant breakthroughs. Amgen is also tapping into the weight loss market, with its phase 1 clinical trial for AMG133 showing promising results in terms of meaningful weight loss and post-treatment durability.
Moreover, Amgen’s recent acquisition of Horizon Therapeutics for approximately $28 billion brings in a portfolio of approved medicines and pipeline candidates, notably Tepezza for thyroid eye disease (TED). While Tepezza is the first and only TED treatment available, its full potential is yet to be realized, offering significant growth prospects for Amgen, especially considering the sizable patient population in the U.S.
Additionally, Amgen boasts a robust pipeline with over four dozen programs in development. With a competitive dividend yield of 3.26% and a 55% increase in payouts over the past five years, Amgen is an attractive dividend stock, particularly appealing to risk-off, long-term, income-seeking investors.
2. Sarepta Therapeutics
Sarepta Therapeutics specializes in pioneering treatments for rare diseases, showcasing impressive innovation within the biotech realm. Notably, the company has successfully developed multiple therapies for Duchenne muscular dystrophy (DMD), a rare genetic disorder characterized by progressive muscle degeneration. Elevidys, Sarepta’s groundbreaking gene therapy for DMD, marks a significant milestone as the first of its kind to receive approval from the U.S. Food and Drug Administration (FDA).
Currently, Sarepta anticipates a potential label expansion for Elevidys that would eliminate age and ambulatory status restrictions, potentially broadening its market reach. Despite its mid-2023 approval, Elevidys has already made meaningful contributions to Sarepta’s financial performance, with the biotech experiencing a 33.3% revenue increase to $1.2 billion last year, with Elevidys generating a robust $200 million in revenue.
Anticipating FDA approval for the label expansion, expected by late June, Sarepta foresees accelerated demand and heightened sales for Elevidys. While Sarepta remains committed to developing therapies for DMD, with over 40 programs dedicated to the disease, the company also seeks to diversify its portfolio. In this pursuit, Sarepta commenced a phase 3 clinical trial in January for a potential therapy targeting Limb-Girdle muscular dystrophy, a group of rare muscle-related disorders.
While Sarepta may not enjoy the same level of name recognition as Amgen, its expertise in rare diseases underscores its ability to continue innovating and delivering breakthrough medicines. With a track record of solid financial performance and promising prospects, Sarepta Therapeutics remains poised for further success and continued growth in the stock market.
