Five Biotech Stocks Soar: Eyes on Halozyme, United Therapeutics, Harmony, Ligand, and ADMA

In mid-July, biotech stocks hit a new two-year high, driven by a wave of promising clinical developments. Despite a significant slowdown in acquisition activity compared to earlier in the year, investor interest has picked up, with the industry group achieving its highest level since January 2022. Although momentum dipped somewhat in August, shares are on the rise again, reflecting renewed optimism.

The biotech sector, buoyed by Big Pharma’s renewed focus on acquisitions, now holds a Relative Strength Rating of 84. This positions it in the top 16% of all industry groups based on 12-month performance. Currently ranked 35th out of 197 industry groups tracked by IBD Digital, the biotech sector continues to show strong market performance and attract investor attention, even amid slower acquisition activity.

Top Biotech Stocks to Watch: Halozyme, United Therapeutics, Harmony, Ligand, and ADMA

When evaluating stocks, it is crucial to focus on specific fundamental and technical metrics. Among the best-performing biotech stocks trading above $10 are Halozyme Therapeutics (HALO), United Therapeutics (UTHR), Harmony Biosciences (HRMY), Ligand Pharmaceuticals (LGND), and ADMA Biologics (ADMA).

Halozyme Therapeutics and United Therapeutics both stand out as top-rated biotech companies, excelling in their respective fields with strong market performance. Halozyme, a leader in drug delivery, is known for its Enhanze technology, which enables subcutaneous drug delivery for major treatments like Johnson & Johnson’s Darzalex Faspro and Roche’s Herceptin. In the second quarter, Halozyme reported impressive results, with a 23% increase in earnings and a 5% rise in revenue compared to the previous year, surpassing market expectations. Following its earnings report on August 7, Halozyme’s stock rose by more than 4%. The company has maintained its 2024 full-year guidance, projecting earnings between $3.65 and $4.05 per share, supported by a newly secured European patent for Enhanze, valid in 37 countries until 2029. Despite strong performance ratings and staying above key moving averages, the stock is not currently forming a new base.

Similarly, United Therapeutics is a key player in developing treatments for chronic diseases, with its flagship product Tyvaso aimed at pulmonary arterial hypertension (PAH). Tyvaso sales showed a solid increase in the June quarter, though slightly below expectations due to lower sales of its nebulized version. Analysts are closely monitoring United Therapeutics’ pipeline, particularly the final-phase PAH study results, now delayed to 2026. With a near-perfect overall rating of 99, United Therapeutics demonstrates strong performance, though its momentum rating is slightly lower at 93. Despite some fluctuations, the company remains a significant contender on the Tech Leaders list. 

Innovative Drug Developments Strategic Collaborations Make These Companies Worth Watching

Also a notable name on the Tech Leaders list is Harmony Biosciences. With its flagship product, pitolisant (marketed as Wakix for narcolepsy), the company has made a significant impact. Harmony sees pitolisant as a key asset with potential uses for idiopathic hypersomnia and Prader-Willi syndrome. In the second quarter, Wakix generated $172.8 million in sales, a 29% increase from last year, meeting expectations. After breaking out from a consolidation pattern on August 14, Harmony stock rose above the 5% chase zone (the price range above a stock’s buy point where investors can still purchase shares as the stock rises), reflecting strong performance. The stock remains well above its 50-day moving average and holds a Composite Rating (CR) of 98 and a Relative Strength (RS) Rating of 84, underscoring its market strength and potential.

Then, with its extensive network of collaborations, Ligand Pharmaceuticals excels by investing in royalty deals and overseeing more than 100 partnered commercial and development-stage programs. Recently, Ligand’s collaborator Merck gained FDA approval for its pneumococcal vaccine, Capvaxie, marking a significant advancement. Additionally, Ligand’s acquisition of Apeiron Biologics for $100 million, which includes royalty rights to the cancer treatment Qarziba, enhances its commercial-stage portfolio. Verona Pharma, another Ligand partner, secured FDA approval for its COPD inhaled treatment, Ohtuvayre, from which Ligand will earn a modest royalty.

In the second quarter, Ligand exceeded expectations with adjusted earnings of $1.40 per share and a notable 57.5% increase in sales, despite a slight dip in earnings per share compared to the previous year. Ligand Pharmaceuticals boasts a strong CR of 97 and an impressive RS Rating of 95, and its stock is positioned for potential growth with a target price of 108.83, which could lead to further gains.

ADMA Biologics Shines with Strong Earnings and Market Performance Amid Ongoing R&D Trends in Oncology and Biopharma

Also ranked on the Tech Leaders list, ADMA Biologics excels in producing human immune globulin products, which are intravenous infusions designed for individuals with immunodeficiencies. The company’s stock surged 31% on August 9, following a report of adjusted earnings of 14 cents per share, significantly surpassing expectations of 8 cents and reversing a loss from the previous year. Sales increased by an impressive 78% year over year to $107.2 million, exceeding forecasts. Consequently, ADMA’s stock is trading well above its 50-day and 200-day moving averages and boasts top ratings of 99 in both RS and CR scores. Currently near a record high, ADMA also leads the IBD 50 list, reflecting its strong market performance and growth potential.

Oncology remains the top focus in biopharma R&D dealmaking, with over $200 billion in agreements in recent years, including $100 billion in 2022 alone. While the number of deals peaked in 2020 and 2021, high-value transactions have continued into 2024. However, deal volume and value in 2024 are unlikely to surpass previous years if current trends persist, with projections suggesting around 200 deals, similar to 2023. Previously, neurologic disorders ranked second in R&D dealmaking, but infectious diseases surged in 2020 due to the COVID-19 pandemic.

Author

Bernice Lottering