BioCryst, Protagonist, Prometheus Biosciences, Rani, and Emergent BioSolutions have withstood the sector selloff.
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For biotech stocks, 2022 had an even bleaker start than for the market as a whole. The SPDR S&P Biotech
exchange-traded fund, a key benchmark for the sector, is down 12.8% so far this year, while the S&P 500 index is down 2.1%.
This comes after a year in which biotech stocks dramatically underperformed the market, with the SPDR S&P Biotech ETF (ticker: XBI) falling 26.9% in 2021, compared with a 27% rise in the S&P 500.
If investors had hoped that the year would open with a big biotech acquisition announcement timed to J.P. Morgan’s health-care conference last week, they were disappointed. Though the week saw plenty of news, no big biotech M&A crossed the wires.
Even as the key biotech indexes have continued to tumble in recent weeks, however, there are some biotech stocks that are still drawing investor interest. In an effort to identify the biotechs that remain hot even in this bearish market for biotech stocks, we screened two biotech ETFs for recent winners.
Our screen looked at stocks in the XBI and another biotech ETF, the iShares Biotechnology ETF
(IBB), that were up more than 15% between Dec. 17 and the close of the market on Jan. 14. We limited our screen to stocks with a market value of more than $1 billion.
The resulting biotechs that investors still like, despite the broader selloff, are BioCryst Pharmaceuticals (BCRX), up 18.8% over the period, Protagonist Therapeutics (PTGX), up 18.5%, Prometheus Biosciences (RXDX), up 18.4%, Rani Therapeutics Holdings (RANI), up 16.3%, and Emergent BioSolutions (EBS), up 15.9%.
The XBI is down 13.1% from Dec. 17 through Jan. 14, while the IBB is down 10%.
5 Biotech Stocks Investors Still Like
Biotech stocks in the IBB or the XBI up more than 15% over the past month
| Company / Ticker | Recent Price | Market Value (bil) | Gain Since 12/17 |
|---|---|---|---|
| BioCryst Pharmaceuticals / BCRX | $15.48 | $2.8 | 18.8% |
| Protagonist Therapeutics / PTGX | $35.96 | $1.7 | 18.5% |
| Prometheus Biosciences / RXDX | $35.29 | $1.4 | 18.4% |
| Rani Therapeutics Holdings / RANI | $20.67 | $1.0 | 16.3% |
| Emergent BioSolutions / EBS | $52.22 | $2.8 | 15.9% |
Source: FactSet
All of the stocks are relatively small biotechs, with the exception of Emergent, which is best known as a contract manufacturer. On Friday after the market closed, Emergent announced that its founder and executive chairman, Fuad El-Hibri, would retire. The stock fell on Tuesday, when the market reopened after the Martin Luther King Jr. Day holiday, and after the period covered by the stock screen.
The other stocks have seen positive news developments in recent weeks. BioCryst, which sells a rare disease therapy called Orladeyo and a flu drug called Rapivab, offered a positive surprise last week when it preannounced sales Orladeyo for the fourth quarter of 2021, and issued guidance for 2022 sales of the drug that were well above Wall Street expectations.
“We are blown away by 2022 guidance of at least $250 million which is materially above consensus of $221 million,” Evercore ISI analyst Liisa Bayko wrote in a Jan. 10 note.
Protagonist, which is developing treatments for a type of blood cancer, and for ulcerative colitis, hasn’t had any major news in recent weeks, though did issue updated data on its polycythemia vera program on Dec. 12.
“With each additional cut of data, we gain additional confidence in rusfertide’s ability to hit the primary endpoint in the upcoming Ph. 3 trial,” wrote SVB Leerink analyst Joseph P. Schwartz in a Dec. 12 note, referring to its experimental polycythemia vera treatment.
Prometheus, which is developing drugs for inflammatory bowel disease, said on Jan. 3 that it had received a milestone payment from partner Dr. Falk Pharma, a German biopharma firm, as part of a collaboration on an inflammatory bowel disease therapeutic program. In a note out after the news, SVB Leerink’s Thomas Smith wrote that Prometheus is one of his top picks for 2022.
Finally, Rani, which develops technologies that would allow drugs known as biologics to be delivered orally, rather than as injections, has had no notable news events in recent months. The stock went public over the summer.
Write to Josh Nathan-Kazis at [email protected]
