Zacks Investment Research | Jan 14, 2018 08:15PM ET
2017 turned out to be a pretty good year for pharma and biotech stocks with the Nasdaq Biotechnology index and the NYSE ARCA Pharmaceutical index gaining 18.7% and 11.8%, respectively. Although the industry continued to face headwinds in the form of drug pricing scrutiny, pricing pressure, increasing competition, concerns regarding Amazon’s interest in entering the healthcare arena, fewer-than-expected acquisition deals and major pipeline setbacks, there were some positive developments as well. There was a significant surge in FDA approvals, investors appeared more comfortable with the drug pricing controversy and innovation won the day with the FDA granting approval to gene therapies for cancer as well as a rare form of blindness. Tax reforms are also expected to work in the sector’s favor with mergers and acquisitions (M&As) expected to pick up in the coming quarters.
New product sales ramp up, R&D success and innovation, continued strong performance from key products, growing demand for drugs especially for rare-to-treat diseases, an aging population and increased health care spending are some of the factors that should keep the momentum in 2018.
As we start the New Year, here is a look at three drug stocks that look well-positioned for 2018 and are witnessing upward estimate revisions and have a favorable Zacks Rank - Zacks Rank #1 (Strong Buy) or #2 (Buy).
Alkermes plc (NASDAQ:ALKS) : Alkermes is focused on the development and marketing of treatments for central nervous system ("CNS") diseases. Key disease areas include schizophrenia, depression, addiction and multiple sclerosis. Earlier this year, the company said that its current commercial business has the potential to generate revenues in excess of $2 billion into the 2020s.
Alkermes also a strong late-stage pipeline representing transformative catalysts in 2018. The company could gain FDA approval by June 30 for a NanoCrystal dispersion of Aristada (schizophrenia). Meanwhile, Alkermes expects to complete filing a rolling submission for ALKS 5461 (major depressive disorder) in January with a potential advisory committee meeting and FDA decision in the second half of the year. The company also expects to submit a new drug application (“NDA”) for ALKS 8700 (multiple sclerosis) in the second half of the year. Data on ALKS 3831 (schizophrenia) is also due this year (metabolic study data in the first half and ENLIGHTEN-2 data in Fall 2018) – the NDA submission for this candidate is scheduled for the first half of 2019. Alkermes has a global license and collaboration agreement with Biogen (NASDAQ:BIIB) for ALKS 8700 for the treatment of multiple sclerosis.
Alkermes has seen the Zacks Consensus Estimate for 2018 earnings being revised 50% upward over the last 30 days. The company also beat expectations in two of the last three quarters with an average surprise of 75% and has an the complete list of today’s Zacks #1 Rank stocks here . XOMA has an Earnings ESP of +10.68% for the fourth quarter of 2017.
Eiger BioPharmaceuticals, Inc. (NASDAQ:EIGR) : Clinical-stage biopharmaceutical company, Eiger, is focused on the development and commercialization of therapies for rare diseases. Some of the diseases being addressed by the company's pipeline include hepatitis delta virus (lonafarnib and lambda), pulmonary arterial hypertension (ubenimex), post-bariatric hypoglycemia (exendin 9-39) and lymphedema (ubenimex). Regulatory and clinical announcements for all these programs are expected in 2018. The Zacks Consensus Estimate for 2018 loss for the Zacks Rank #2 stock has been lowered 6.7% over the last 30 days. Eiger’s shares are up 32.3% over the last one year.
While Eiger has surpassed expectations in three of the last four quarters, the Earnings ESP for the fourth quarter of 2017 is +0.73%.
Wall Street’s Next Amazon (NASDAQ:AMZN)
Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It’s a once-in-a-generation opportunity to invest in pure genius.
Original post
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.