4 Biotech Stocks Ready To Crush The Market In 2018

The year 2017 has been quite a impressive one for the biotech sector as evident from the 19.4% gain registered so far by the NASDAQ Biotechnology Index (^ (LON:NBI) . This is surely welcome news for investors since the industry suffered a decline of 19.2% last year.

While drug pricing issue, competition and a slowdown in growth of key drugs dented the sector’s 2016 performance, new drug approvals and encouraging outlook by the companies boosted investor sentiment in 2017.

Immuno-oncology continued to remain in spotlight in 2017. The FDA’s approval of CAR-T (chimeric antigen T-cell receptor) therapies like Kymriah and Gilead Sciences’ (NASDAQ:GILD) Yescarta for leukemia and lymphoma shifted investors’ attention toward small biotechs companies developing these therapies. Investors also kept tab of key candidates’ data.

The slowdown in mature products forced bigwigs like Gilead to undertake acquisitions to bolster pipelines. Gilead acquired erstwhile Kite Pharma to add Yescarta to its kitty. The company also inked an agreement to acquire Cell Design Labs. Celgene Corporation (NASDAQ:CELG) too might be on the look-out for acquisitions to bolster its portfolio.

Approval of new drugs like Dupixient, Kevzara, Idhifa, Tremfya among others along with label expansion of existing drugs like Cabometyx boosted the respective companies’ portfolios. We note that 2017 saw a larger number of drug approvals from the FDA than 2016.

Although the threat of biosimilars loom large on the sector, we expect a further boost in performance from the sector in 2018. Notably, the Medical - Biomed/Genetics sub-industry carries a Zacks Industry Rank of 114, which places it at the top 45% of the 250 plus Zacks industries.

While the smaller biotechs have performed impressively in 2017, the bigwigs weren’t far behind and we expect the momentum to continue in 2018 as well. Here we list a few biotech companies which should outperform the market in 2018:

ACADIA Pharmaceuticals Inc. (NASDAQ:ACAD) ’s lead drug Nuplazid is approved for the treatment of hallucinations and delusions associated with Parkinson’s disease psychosis. The drug was approved in 2016 by the FDA. Notably, it is the only drug approved in the United States for this condition. The drug generated sales of $81.3 million in the first nine months of 2017 and the company is looking to expand the drug’s label further. 2017 was a roller-coaster ride for Acadia. Shares of the company have moved up 5.6% year-to-date compared with the SBMFF researches, develops, manufactures and markets a wide array of Chinese medicines and chemical medicines for two major therapeutic categories — hepatitis and cardio-cerebral diseases. The company also actively develops medicines for treating tumors, analgesia, orthopedic diseases, anti-infection, parenteral nutrition, respiratory system diseases, anorectal diseases, diabetes and other diseases to meet the increasing demand of the market, medical practitioners and patients. The lead products include Tianqingganmei injections, Runzhong dispersible tablets, Mingzheng capsules, Tianqingganping enteric capsules along with cardio-cerebral medicines such as Yilunping and Tuotuo tablets. The company currently carries a Zacks Rank #2.

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We expect investors to remain focussed on this dynamic sector eying new drug approvals and important data read-outs.

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Written By: Zacks Investment Research