In this article, we will be taking a look at the 10 best performing biotech stocks in 2024.
The Booming Biotechnology Sector
The biotechnology sector is expanding quickly due to rising demand for novel therapies, advancement in technology, and government assistance. New techniques are being made possible by advancements in fields like gene editing, sequencing, personalized medicine, and artificial intelligence, while the aging population and growing healthcare demands are driving a robust market for new treatments. Venture capital firms made approximately $52 billion in global investments in therapeutic-focused biotech companies between 2019 and 2021. Two-thirds of this sum was given to platform-tech start-up companies.
The worldwide biotechnology market was estimated to be valued at $1.38 trillion in 2023 and is projected to reach a valuation of approximately $4.25 trillion by 2033, growing at a compound annual growth rate (CAGR) of 11.8% from 2024 to 2024.
The U.S. biotechnology sector, in particular, was estimated to be worth $246.18 billion last year and is projected to reach about $830.31 billion at a compound annual growth rate (CAGR) of 11.6% from 2024 to 2034, according to previous research. The revenue proportion for Asia Pacific was 23.99%, whilst the revenue share for North America was 37.79%. The bioindustry application segment accounted for 24.33% of total revenue in 2023, while the biopharmacy segment held a 41.73% revenue share by application. For 2023, the tissue engineering and regeneration market is expected to account for 19.26% of total revenue.
Despite its potential, there are many risks associated with investing in biotech companies. With 90% of initiatives failing and drug development lasting more than ten years, the industry has a high failure rate. Businesses frequently face bankruptcy if they miss clinical trial endpoints or don’t have enough money before launching a product. As a result of its significant risks and growth potential, biotech is commonly considered a “high-risk, high-reward” investment.
Challenges and Opportunities Shaping the Future of Biotechnology
Biotech businesses have been further challenged by volatile market conditions, which have led several of them to reduce programs and lay off huge numbers of employees to save money. Although recent rate cuts may assist in resurrecting scientific initiatives, analysts like Jared Holz point out that it is still challenging to forecast their consequences. Holz also points out that the performance of biotech companies is increasingly matching that of small-cap stocks, indicating a change in market dynamics. Biotech may increase if small-cap stocks trade well, but stagnation could result from momentum loss. Interest rates and biotech success have a relatively recent relationship that emerged after the pandemic when enterprises with a therapeutic focus received a lot of investment.
Biotech companies are addressing significant unmet medical needs by developing novel therapies that are transforming healthcare. A major advancement is the creation of the National Bioeconomy Board as part of Biden’s Investing in America plan. It aims to optimize the economic potential of biotechnology in the US.
Additionally, the National Security Commission on Emerging Biotechnology is developing policy recommendations to speed up the approval process for biotechnology products. Reducing barriers to entrance will enable more scholars to apply biotechnology to agriculture, which will help American farmers and improve food security. These projects are expected to create new markets.
A laboratory filled with modern equipment, scientists examining the latest biotechnology breakthroughs.
Our Methodology
We selected biotech companies with the best year-to-date (YTD) performance and a market cap of at least $10 billion. This ensured our focus on larger, established firms. The companies were then ranked by their YTD performance as of December 21st to highlight the top performers.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
Here is our list of the best-performing biotech stocks in 2024.
10. Sarepta Therapeutics, Inc. (NASDAQ:SRPT)
Total YTD Return: 23.66%
Sarepta Therapeutics, Inc. (NASDAQ:SRPT) is a biopharmaceutical company focused on precision genetic medicines for rare genetic diseases, such as Duchenne muscular dystrophy (DMD) and limb-girdle muscular dystrophies (LGMDs). It develops gene therapies, RNA-targeted therapies, and gene editing technologies, with FDA-approved treatments like ELEVIDYS, Exondys 51, Vyondys 53, and Amondys 45. These products are primarily sold to patients with rare genetic conditions, particularly DMD.
In Q3 2024, Sarepta Therapeutics, Inc. (NASDAQ:SRPT) reported strong financial results, with total revenues of $467.2 million, a 41% increase from the previous year. This growth was driven by the successful launch and expanded label of ELEVIDYS, their gene therapy for Duchenne muscular dystrophy (DMD), which generated $181 million in net product revenue. The PMO exon skipping franchise also contributed $248.8 million in revenue, and collaboration revenue from Roche increased to $37.4 million.
As one of the best-performing stocks in the biopharmaceutical sector, Sarepta Therapeutics, Inc. (NASDAQ:SRPT) achieved a GAAP net income of $33.6 million, marking a turnaround from the previous year’s loss. For the first nine months of 2024, their total revenues reached $1.24 billion, a 47% year-over-year increase. The company is also expanding its portfolio, with its lead Limb-Girdle Muscular Dystrophy (LGMD) candidate, SRP-9003, expected to begin regulatory filings in 2025, potentially adding $4.7 billion in sales potential.
As of Q3 2024, 50 hedge funds held shares in the company as tracked by the Insider Monkey database. The largest shareholder was Farallon Capital with holdings worth $322.2 million. Street analysts hold a consensus Strong Buy rating on the stock.
9. Catalysts Pharmaceuticals, Inc. (NASDAQ:CPRX)
Total YTD Return: 24%
Catalyst Pharmaceuticals, Inc. (NASDAQ:CPRX) is a biopharmaceutical company dedicated to addressing rare and debilitating diseases, focusing on neurological and neuromuscular conditions. Its flagship product, Firdapse (amifampridine), is approved for treating Lambert-Eaton Myasthenic Syndrome (LEMS) in adults and children aged six and older. The company also markets Fycompa (perampanel), a medication for focal onset and tonic-clonic seizures in epilepsy, which it acquired in 2023. Additionally, Catalyst Pharmaceuticals, Inc. (NASDAQ:CPRX) launched Agamree (vamorolone) in 2024, an oral suspension for Duchenne Muscular Dystrophy (DMD), achieving strong initial commercial success.
Catalyst Pharmaceuticals Inc. (NASDAQ:CPRX) has emerged as a top-performing biotech stock in 2024. In Q3 2024, the company reported total revenues of $128.7 million, a 25.3% year-over-year increase which was primarily fueled by net product revenues of $126.4 million, up 23.2% from Q3 2023. Net income reached $43.9 million, a significant turnaround from a $30.8 million loss in the same quarter of 2023.
The corporation’s revenue growth was largely driven by Firdapse, which achieved $79.3 million in net product revenues, a 19.7% year-over-year increase. Additionally, the newly launched Agamree, for Duchenne Muscular Dystrophy demonstrated early success, contributing $8.7 million in Q2 2024 and showing continued growth in Q3. Fycompa, the epilepsy drug, also saw a 5.7% year-over-year revenue increase. With updated full-year revenue guidance of $475–$485 million, Catalyst Pharmaceuticals Inc. (NASDAQ:CPRX) continues to capitalize on its expanding product portfolio and market opportunities.
8. Alnylam Pharmaceuticals, Inc. (NASDAQ:ALNY)
Total YTD Return: 25.91%
Alnylam Pharmaceuticals, Inc. (NASDAQ:ALNY) is a biopharmaceutical company that utilizes RNA interference (RNAi) technology to develop therapies for rare genetic diseases. Its commercial products include ONPATTRO (patisiran) for hATTR amyloidosis, GIVLAARI (givosiran) for acute hepatic porphyria, OXLUMO (lumasiran) for primary hyperoxaluria type 1, Leqvio (inclisiran) for hypercholesterolemia (licensed to Novartis), and AMVUTTRA (vutrisiran) for ATTR amyloidosis. The company sells its products to patients, healthcare providers, and pharmacies, and collaborates with pharmaceutical companies like Novartis for distribution and development.
Alnylam Pharmaceuticals, Inc. (NASDAQ:ALNY) revealed impressive financial results for the third quarter of 2024. The company’s total product revenue reached $420 million, a 34% increase from the previous year. The TTR franchise brought in $309 million, a 34% increase in revenue, while the rare disease franchise brought in $111 million which indicated a similar growth rate. Growing patient demand, especially within the TTR franchise, was the main driver of the company’s revenue growth.
Globally, Alnylam Pharmaceuticals, Inc. (NASDAQ:ALNY) is treating about 5,000 patients with ONPATTRO or AMVUTTRA for hATTR polyneuropathy. However, according to the business, between 25,000 and 30,000 people worldwide are afflicted with this illness which suggests that there is room for substantial expansion. In addition, the company is getting ready for a possible launch in ATTR cardiomyopathy, subject to regulatory approval. The company’s addressable market may rise considerably as a result of this development, which could spur further growth.
With several significant advancements, the corporation is moving forward with its pipeline. In both the US and the EU, it has finished submitting regulatory applications for vutrisiran in ATTR cardiomyopathy. Additionally, Alnylam Pharmaceuticals, Inc. (NASDAQ:ALNY) revealed encouraging findings from a Phase 1 study of mivelsiran for early-onset Alzheimer’s disease and started a Phase 1 investigation for ALN-HTT02, which targets Huntington’s disease. The company wants to greatly increase its clinical pipeline by filing nine own INDs and maybe 15 new INDs by the end of 2025, including partnered initiatives.
The stock has a consensus rating of Moderate Buy from street analysts, with an average 12-month price target of $313.81. The price target range, which is from $205.00 to $400.00, indicates a possible 28.14% increase from the stock’s current price of $244.89.