The biotech sector represents companies that use biological processes to develop new medicines and treatments. These firms range from small startups to large pharmaceutical giants. Biotech stocks are shares in these innovative companies that trade on public exchanges. The sector is known for its potential to revolutionize healthcare and generate significant returns. However, it’s also associated with high risk due to the complex nature of drug development.
Investing in biotech stocks can offer exciting opportunities. A successful drug can lead to substantial profits and long-term revenue streams. Biotech companies often become acquisition targets for larger pharmaceutical firms, potentially boosting stock prices. The sector benefits from an aging population and increasing demand for new treatments. However, biotech investments come with considerable risks. Many companies fail to bring products to market. The drug approval process is lengthy, expensive, and uncertain. Biotech stocks can be highly volatile, reacting strongly to clinical trial results.
When considering biotech stocks, thorough research is crucial. Look at the company’s drug pipeline and the potential market for their treatments. Understand the stages of clinical trials and regulatory hurdles. Consider the company’s cash reserves and ability to fund ongoing research. Be aware that many biotech firms are not yet profitable. Diversification across different biotech companies or subsectors can help manage risk. Remember that biotech investing requires patience and a high tolerance for uncertainty. That said, let’s explore two biotech stocks to watch in the stock market now.
Biotech Stocks To Buy [Or Avoid] Now
- Novo Nordisk A/S (NYSE: NVO)
- Regeneron Pharmaceuticals Inc. (NASDAQ: REGN)
Novo Nordisk (NVO Stock)
First up, Novo Nordisk A/S (NVO) is a global healthcare company. They specialize in diabetes care and other chronic diseases, including obesity, hemophilia, and growth disorders. Novo Nordisk is popular for its insulin products and has been expanding its presence in the obesity treatment market.
This week, Novo Nordisk announced an update on its ongoing share repurchase program. The company is buying back its own B shares as part of a larger DKK 20 billion repurchase plan. Novo Nordisk has been purchasing shares daily since September 2, with varying amounts and prices. As of September 6, the company had repurchased 956,187 B shares under this specific program. In total, Novo Nordisk now owns 13,351,944 B shares as treasury stock, representing 0.3% of its share capital. The company plans to continue this repurchase program, which began in February 2024, for a 12-month period.
Year-to-date, shares of NVO stock have increased by 27.10% so far. Meanwhile, as of Tuesday’s closing bell, Novo Nordisk stock finished the day down 1.61%, trading at $129.78 a share.
[Read More] Top Dividend Stocks To Invest In September 2024? 2 To Watch
Regeneron Pharmaceuticals (REGN Stock)
Second, Regeneron Pharmaceuticals Inc. (REGN) is a biotechnology company that discovers, develops, and commercializes medicines for serious diseases. They focus on areas such as eye diseases, allergic and inflammatory conditions, cancer, and cardiovascular diseases. Regeneron is recognized for its proprietary technologies in drug development, including its VelociSuite® platforms.
At the beginning of last month, Regeneron Pharmaceuticals reported its second quarter of 2024 financial and operating results. Diving right in, the biotech company announced Q2 2024 earnings of $11.79 per share, with revenue of $3.55 billion. This is compared to analysts’ estimates for the quarter, which were an EPS of $10.62 per share, and revenue estimates of $3.39 billion. Additionally, revenue grew by 12.32% versus the same period, the previous year.
In 2024, Regeneron Pharmaceuticals shares have gained by 25.56% YTD. Moreover, as of Tuesday’s closing bell, shares of REGN stock finished the day down 0.74%, trading at $1,136.35 a share.
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