Overview of Biotech Stocks - What Could Happen by the End of 2021?
November 3, 2021 (Investorideas.com Newswire) A global pandemic has reinforced the fact that humanity needs to continue investing in medical developments, and as a result, biotech stocks were among the most favored during the past two years. IBB, the iShares Biotechnology ETF, is up around 60% when compared to its March 2020 figures, but although the industry as a whole continues to expand, there are several names that stand out from the crowd.
In the US, Europe, and Asia, eyes are monitoring the biotech sector in general, and in particular companies that managed to come out with efficient COVID-19 vaccines (Pfizer, Moderna, etc.). Other institutions currently working on cures for diseases posing a threat for many people around the world are also attracting attention.
Top Biotech Stocks in 2021
Although online trading is now focused on sectors like energy, tech and fintech, there are still traders who see biotech as a place where new opportunities can arise at any point. Several companies managed to outperform price-wise or by volatility, which generates short-term trading setups to take advantage of.
One of them is Maravai LifeSciences Holdings Inc, a company developing drug therapies, diagnostics, and vaccines for a variety of diseases. Listed on the Nasdaq, it is currently placed among the fastest-growing biotech companies.
CRISPR Therapeutics AG is a Swiss company developing gene-based medicines for diseases in areas like hemoglobinopathy, regenerative medicine, and oncology. This brand specifically has witnessed strong revenue growth this year, mainly thanks to a collaboration with Vertex Pharmaceuticals Inc.
Royalty Pharma PLC is a biopharmaceutical product investment company that also puts an emphasis on collaborating with research hospitals, academic institutions, and others to develop treatments. Its profile of pharmaceutical investments currently includes commercial products and development-stage candidates. Same as CRISPR Therapeutics, it also witnessed strong EPS growth this year, after operating income climbed by 82.2% YoY.
Performance of Biotech Stocks
Looking at Biotech ETFs performances, it turns out that the industry as a whole did not experience strong value growth during the past few months. In fact, ETFs like ARKG are currently trading in the negative territory for the year, which means retail traders should analyze the market and see what companies manage to stand out.
The Maravai LifeSciences Holdings stock price had an impressive performance during the summer but has erased almost all of its gains by the time of writing. CRISPR Therapeutics is currently trading in negative territory, and so is Royalty Pharma PLC.
Expectancies for Q4
Based on current developments, the last quarter of 2021 should not bring major changes to the biotech industry. Some companies might outperform on earnings growth or better prospects, but the sector as a whole seems to be peaking.
On one side, long-term investors will have a harder time finding companies that can outperform, while on the other, even if biotech stocks weaken, that could mean short-term retail traders can still take advantage by using derivatives widely available at online brokerages. Generally speaking, the last quarter of the year is positive for stocks and biotech has a favorable time ahead to bank additional gains.
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