11 Best Immunotherapy Stocks To Buy Now

Published on October 30, 2023 at 5:25 am by Sheryar Siddiq in Hedge Funds, News

In this article, we discuss 11 of the best immunotherapy stocks to buy now. If you want to skip our detailed discussion on the cancer and oncology industry, head directly to the 5 Best Immunotherapy Stocks To Buy Now.

The global oncology landscape is continually transforming, driven by persistent efforts to explore, create, and deliver innovative treatments aimed at enhancing outcomes for a growing patient population. The oncology product portfolio is rapidly expanding, with more than 2,000 products currently in various stages of development. A significant share of these products, approximately 71%, is being spearheaded by emerging biopharmaceutical companies. This represents a substantial increase in their role in cancer therapy development, up from 51% in 2017. On a global scale, the past two decades have witnessed the introduction of 237 new active substances for cancer treatment, with nearly 115 of them launched within the last five years. In the United States, there have been 78 new active substance launches in the past five years, contributing to a total of 189 over the last two decades.

The global cancer immunotherapy market, which was valued at $115.01 billion in 2022, is projected to experience a compound annual growth rate (CAGR) of 8.7% from 2023 to 2030. This growth is primarily driven by the increasing prevalence of oncology cases worldwide and a notable surge in research and development activities aimed at creating innovative oncology treatments. The growth of this market is attributed to several factors, such as the rising incidence of various cancer types, the approval and introduction of new drugs, and enhanced research initiatives by pharmaceutical companies specializing in oncology. As an illustration, the American Cancer Society (ACS), estimates that around 1.9 million new cancer cases will be diagnosed in the United States in 2023. This projection excludes basal cell and squamous cell skin cancers, as they are not required to be reported to cancer registries, and it does not encompass noninvasive cancer, with the exception of urinary bladder cancer. Furthermore, an estimated 609,820 individuals in the United States are expected to succumb to cancer in 2023, equivalent to approximately 1,670 deaths each day.

Moreover, cancer imposes a substantial and rapidly increasing financial burden. In 2018, a study conducted by Penn State College of Medicine revealed that the top 15 cancer types resulted in a cost exceeding $156 billion in the United States. Ominous forecasts from the National Cancer Institute suggest that the nationwide costs attributed to cancer-related medical services and prescription drugs are projected to rise from $183 billion in 2015 to $246 billion by 2030, reflecting a 34% increase.

Conversely, the realm of cancer vaccines has garnered significant global attention. Merck & Co., Inc. (NYSE:MRK) and Moderna, Inc. (NASDAQ:MRNA) recently forged a promising partnership to combine an mRNA cancer vaccine with Moderna’s Keytruda®. Phase 2 trials have demonstrated a remarkable 44% reduction in the risk of cancer recurrence or death when compared to Keytruda alone. Additionally, BioNTech SE (NASDAQ:BNTX), a German biotechnology firm, joined forces with the UK government some time ago, cementing a Memorandum of Understanding (MoU) aimed at providing up to 10,000 patients with personalized mRNA-based cancer immunotherapies by 2030.

This article highlights some of the best immunotherapy stocks for potential investment, featuring the likes of Pfizer Inc. (NYSE:PFE), Merck & Co., Inc. (NYSE:MRK), and Johnson & Johnson (NYSE:JNJ).

A radiologist studying a monitor with a detailed image of a lung cancer tumor.

Our Methodology

We selected the following immunotherapy stocks based on the hedge fund sentiment toward each stock. We have assessed the hedge fund sentiment from Insider Monkey’s database of 910 elite hedge funds tracked as of the end of the second quarter of 2023. The list is arranged in ascending order of the number of hedge fund investors in each firm.

11. Guardant Health, Inc. (NASDAQ:GH)

Number of Hedge Fund Holders: 36

Guardant Health, Inc. (NASDAQ:GH), a leading player in the field of cancer therapeutics, specializes in precision oncology, providing a wide range of services including blood tests, data analysis, and global insights. The company has established a research collaboration with the Parker Institute for Cancer Immunotherapy, with a primary focus on investigating the correlation between molecular cancer biomarkers and patient responses to immunotherapy treatments in various cancer types.

On August 3, Guardant Health, Inc. (NASDAQ:GH) reported a Q2 non-GAAP EPS of -$0.82 and revenues totaling $137.15 million, surpassing Wall Street expectations by $0.11 and $7.73 million, respectively.

According to Insider Monkey’s second quarter database, 36 hedge funds were bullish on Guardant Health, Inc. (NASDAQ:GH), up from 27 funds in the previous quarter. Steve Cohen’s Point72 Asset Management held a significant position in the company, with 2.7 million shares valued at $97.17 million.

Here is what Aristotle Atlantic Partners has to say about Guardant Health, Inc. (NASDAQ:GH) in its Q2 2023 investor letter:

“Guardant shares ended the quarter strong, recovering to some extent from the previous weakness in the quarter, as the company reported accelerating clinical volume growth and raised earnings guidance. In addition, the company announced additional U.S. commercial insurance coverage for their Guardant 360 test in the U.S. and government reimbursement in Japan. Lasty, the company completed a successful secondary offering, raising approximately $250 million.”

Similar to Pfizer Inc. (NYSE:PFE), Merck & Co., Inc. (NYSE:MRK), and Johnson & Johnson (NYSE:JNJ), Guardant Health, Inc. (NASDAQ:GH) is one of the best immunotherapy stocks to buy.

10. Moderna, Inc. (NASDAQ:MRNA)

Number of Hedge Fund Holders: 40

Moderna, Inc. (NASDAQ:MRNA) is a prominent biotechnology company dedicated to advancing messenger RNA therapeutics and vaccines. With a strong focus on a wide spectrum of medical areas including immuno-oncology, infectious diseases, rare diseases, autoimmune conditions, and cardiovascular diseases, Moderna serves regions across the United States and Europe. The company boasts a diverse portfolio that encompasses systemic treatments, cancer vaccines, immuno-oncology solutions, and various therapeutics tailored to address a range of medical conditions.

Moderna, Inc. (NASDAQ:MRNA) and Caris Life Sciences revealed a new partnership designed to support Moderna’s innovative oncology and therapeutic programs on October 24. This multi-year agreement will harness Caris’ extensive collection of de-identified data obtained from a variety of sources, including whole exome sequencing, whole transcriptome sequencing, and protein analyses, alongside claims data. The aim is to bolster Moderna, Inc. (NASDAQ:MRNA)’s oncology pipeline by optimizing clinical trial designs, identifying novel biomarkers, and characterizing resistance mechanisms.

Insider Monkey took a look at 910 hedge fund holdings for 2023’s second quarter to find out that 40 had invested in Moderna, Inc. (NASDAQ:MRNA). Philippe Laffont’s Coatue Management is the firm’s biggest shareholder, through a stake worth $795 million.

Baron Health Care Fund made the following comment about Moderna, Inc. (NASDAQ:MRNA) in its Q1 2023 investor letter:

“Moderna, Inc. (NASDAQ:MRNA) is a leader in the emerging field of mRNA-based vaccines and therapeutics and was one of the three main producers of the COVID vaccine. Shares fell during the quarter. We believe as COVID shifts away from pandemic status and becomes an increasingly commercial market (rather than government funded), there is increasing investor uncertainty around what a booster market could look like, which is pressuring shares. Looking beyond COVID, we think Moderna has the potential to disrupt the biopharmaceutical industry, from infectious disease vaccines to oncology, and we remain shareholders.”

9. AstraZeneca PLC (NASDAQ:AZN)

Number of Hedge Fund Holders: 41

AstraZeneca PLC (NASDAQ:AZN) is a leading biopharmaceutical company specializing in the research, development, manufacturing, and distribution of prescription medications. The company’s diverse portfolio includes a range of oncology medications such as Calquence, Enhertu, Faslodex, Imfinzi, Iressa, Koselugo, Lumoxiti, Lynparza, Orpathys, Tagrisso, and Zoladex. AstraZeneca is renowned as one of the top choices for cancer stock investments. Besides oncology, AstraZeneca (NASDAQ: AZN) is actively involved in advancing treatments for various medical conditions, encompassing cardiovascular, renal, and metabolic diseases, respiratory and immunological disorders, rare diseases, as well as contributing to influenza and COVID-19 solutions. On July 28, AstraZeneca PLC (NASDAQ:AZN) announced a Q2 non-GAAP revenue of $11.42 billion and an EPS of $2.15, surpassing estimates by $400 million and $1.18, respectively.

According to Insider Monkey’s second quarter database, 41 hedge funds were bullish on AstraZeneca PLC (NASDAQ:AZN), compared to the last quarter when 39 funds had invested in the stock. Rajiv Jain’s GQG Partners is the largest stakeholder of the company, with 21.2 million shares valued at $1.52 billion.

8. Illumina, Inc. (NASDAQ:ILMN)

Number of Hedge Fund Holders: 43

Illumina, Inc. (NASDAQ:ILMN) is a company specializing in the development, manufacturing, and distribution of tools and systems used for in-depth analysis of genetic variations and biological functions. It operates through two main segments: Core Illumina and GRAIL. The company provides various instruments and materials for genetic sequencing and analysis, along with a multi-cancer early detection test known as Galleri.

On August 9, Illumina, Inc. (NASDAQ:ILMN) announced results for the second quarter of 2023. The company reported a non-GAAP EPS of $0.32 and a revenue of $1.18 billion, exceeding estimates by $0.30 and $11.11 million, respectively.

As of the second quarter, there were 43 hedge funds that expressed a bullish sentiment towards Illumina, Inc. (NASDAQ:ILMN), while 44 funds held positions in the stock in the previous quarter. Notably, Select Equity Group stands out as the largest holder of Illumina, with 1.5 million shares valued at $280 million.

RiverPark Large Growth Fund made the following comment about Illumina, Inc. (NASDAQ:ILMN) in its Q2 2023 investor letter:

“Illumina, Inc. (NASDAQ:ILMN): Illumina was our top detractor in the quarter despite reporting first quarter results that were generally in line with expectations and reaffirming full-year guidance. Uncertainty around activist investor Carl Icahn’s impact on the business, the change of CEO and the possible forced divestiture of liquid biopsy subsidiary Grail (early-stage cancer screening via blood samples) all weighed on Illumina’s stock price.

We continue to view the company’s core genomics industry as offering one of the larger total addressable markets that we cover, and ILMN is the clear innovation leader in sequencing and array-based solutions for genetic analysis. With less than 0.02% of humans having been sequenced and 99% of the variants discovered in the genome having not yet been deciphered, Illumina, at less than $5 billion of TTM revenue, is still in its infancy in what is potentially a greater than $50 billion genetics analysis tools market opportunity. We believe Carl Icahn’s involvement is neutral to slightly positive to the extent he can help the company be more disciplined on expenses. We are cautiously optimistic that EU regulators’ push to force Illumina to divest Grail will lead to either or both 1) much higher core earnings or 2) a big valuation for Grail in a sale. We added to our ILMN position during the quarter; it is a core holding.”

7. Jazz Pharmaceuticals plc (NASDAQ:JAZZ)

Number of Hedge Fund Holders: 44

Jazz Pharmaceuticals Plc (NASDAQ:JAZZ) is a biopharmaceutical company dedicated to the research, development, and global distribution of pharmaceutical products and immunotherapies aimed at addressing unmet medical needs. The company’s product portfolio is primarily concentrated in two key areas – oncology, encompassing hematologic and solid tumors, and neuroscience, which includes sleep medicine and movement disorders.

In August, Jazz Pharmaceuticals Plc (NASDAQ:JAZZ) reported Q2 adjusted EPS of $4.51, surpassing expectations by $0.08. The quarter witnessed a 2.6% year-over-year increase in revenue, reaching $957.32 million, surpassing estimates by $15.16 million. Furthermore, Jazz Pharmaceuticals Plc (NASDAQ:JAZZ) revised its full-year 2023 guidance upward.

According to Insider Monkey’s second quarter database, 44 hedge funds were bullish on Jazz Pharmaceuticals plc (NASDAQ:JAZZ), up from 40 funds in the last quarter. Robert Pohly’s Samlyn Capital held the largest position in the company, with 1.35 million shares worth $166.9 million.

6. Amgen Inc. (NASDAQ:AMGN)

Number of Hedge Fund Holders: 57

Amgen Inc. (NASDAQ:AMGN) is a global biopharmaceutical company involved in the research, development, production, and distribution of human therapeutics. A noteworthy player in the immunotherapy sector, the company primarily focuses on several key therapeutic areas, including oncology/hematology, inflammation, bone health, cardiovascular diseases, nephrology, and neuroscience. As of October 26, the company offers a quarterly dividend of $2.13 per share, resulting in a dividend yield of 3.26%.

The number of hedge funds tracked by Insider Monkey reported having stakes in Amgen Inc. (NASDAQ:AMGN) stood at 57 in Q2 2023, the same as in the previous quarter. The consolidated value of these stakes is over $1.56 billion. With over 1.6 million shares, Two Sigma Advisors was the company’s leading stakeholder in Q2.

Aristotle Capital Value Equity Strategy made the following comment about Amgen Inc. (NASDAQ:AMGN) in its Q3 2023 investor letter:

“Amgen Inc. (NASDAQ:AMGN), the biopharmaceutical company, was the top contributor for the quarter. The company continues to leverage its innovative platform to strengthen its product portfolio, offset maturing products, such as Epogen and Neulasta, and increase market share. Over the past year, Amgen has reported double‐digit volume growth, operating margin expansion to over 40% and record levels of sales for cholesterol drug Repatha, bone‐strengthening drug Prolia and cancer drug Blincyto. Additionally, the company remains well positioned to benefit from the continued development and commercialization of biosimilars such as Amgevita, the first biosimilar to Humira, and the successful integration of Otezla to bolster its inflammation segment. Lastly, the FTC agreed to allow Amgen to proceed with its $27.8 billion acquisition of Horizon Therapeutics. We note that this is yet another unsuccessful attempt by the FTC to block an M&A transaction of one of our holdings (see below re: Activision Blizzard). The transaction closed on October 6, 2023 and brings expertise in rare disease therapies (including bulging eye‐drug Tepezza), as well as adds to Amgen’s immunology portfolio.”

Like Pfizer Inc. (NYSE:PFE), Merck & Co., Inc. (NYSE:MRK), and Johnson & Johnson (NYSE:JNJ), Amgen Inc. (NASDAQ:AMGN) ranks high on our list of the best immunotherapy stocks to buy.

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