In this article, we will discuss the 12 Most Profitable Biotech Stocks Today. You can skip our industry overview and go directly to the 5 Most Profitable Biotech Stocks Today.
The term “biotechnology” refers to the utilization of living organisms or biological systems to create solutions that address various agricultural, industrial, and health-related problems. The most well-known application of biotechnology is the use of genetic engineering to produce therapeutic proteins and other medications. Biotech’s comparative advantage over Big Pharma is its increased return on investment. According to a Deloitte report, biotech firms can produce a return on R&D of 9.3% as opposed to a 1.9% return for multinational pharmaceuticals.
The biotechnology sector played a crucial role in the fight against COVID-19 in 2020. BioNTech SE (NASDAQ:BNTX), a German biotechnology company, was responsible for the first COVID vaccine to receive FDA approval, which was later manufactured and marketed in partnership with Pfizer Inc. (NYSE:PFE). The rapid development of COVID-19 vaccines by the biotech industry was a remarkable feat that garnered much attention and appreciation. This, in turn, led to a surge in investor interest, and the biotech IPO boom of 2020 and 2021 saw 158 companies going public.
Photo by National Cancer Institute on Unsplash
In 2021, Venture Capitalists invested in 3,100 biotech startups, while the industry was able to raise a staggering amount of $34 billion globally. Additionally, according to EY, in 2021, the biotechnology industry’s revenues were higher by 55% compared to 2016. However, much like other sectors, the biotech sector faced a slowdown in 2022 with low venture funding and a slowdown in number of IPOs as compared to 2021. Even the companies that did go public in 2022 ended up performing not particularly well, as reported by Crunchbase. However, in May 2022, McKinsey claimed that even after the downturn, the S&P biotech index had delivered ten-year returns comparable to those of the S&P 500 and higher than those of the S&P pharmaceuticals index.
In the agriculture sector, biotech aims to promote sustainable farming practices that also promise high yields. While in the industrial sector, biotech is being used to generate bio-fuels which are a cheaper alternative to fossil fuels. Several traditional pharma companies have diversified their operations to include biotechnology in their business. For example, Pfizer Inc. (NYSE:PFE) and Roche Holding AG (OTC:RHHBY) are pharmaceutical companies that have made significant investments in the biotechnology sector.
Our Methodology
To come up with the 12 most profitable biotech stocks today, we have sourced data from websites like Yahoo Finance to identify profitable biotech companies. We then proceeded to rank the companies in our list in ascending order of their Net Income over the previous four quarters.
Most Profitable Biotech Stocks Today
12. Bristol-Myers Squibb Company (NYSE:BMY)
Net Income TTM: $6.32 billion
Bristol Myers Squibb Company (NYSE:BMY) is a renowned American biopharmaceutical company engaged in the development of therapeutic solutions for oncology, hematology, immunology, and cardiovascular disease. Bristol Myers Squibb Company (NYSE:BMY) research pipeline currently includes over 50 compounds in more than 40 disease areas.
On February 2, 2023, Bristol-Myers Squibb Company (NYSE:BMY) reported its Q4 2022 result, reporting revenue of €11.4 billion, surpassing the analysts’ projection of $11.2 billion. Additionally, the company posted an EPS of $1.82, higher than the analyst’s projection of $1.72 per share.
In addition to Bristol-Myers Squibb Company (NYSE:BMY), Pfizer Inc. (NYSE:PFE), Johnson & Johnson (NYSE:JNJ), and Roche Holding AG (OTC:RHHBY) are included in our list of 12 most profitable biotech stocks today.
According to Insider Monkey’s database, 69 hedge funds held stakes worth $1.7 billion in Bristol Myers Squibb Company (NYSE:BMY) in Q4 2022, compared to 68 funds in the prior quarter with stake worth $1.7 billion.
Baron Funds mentioned Bristol-Myers Squibb Company (NYSE:BMY) in its Q2 2022 investor letter. Here is what the firm has to say:
“We established a position in Bristol-Myers Squibb Company, a global biopharmaceutical company focused on discovering, developing, and selling medicines for patients in the therapeutic areas of oncology, immunology, cardiovascular, and neurology. The stock trades at a low valuation relative to its current earnings because the company faces loss of exclusivity on several key drugs over the next eight years, including Revlimid, Eliquis, and Opdivo.
At the same time, Bristol-Myers has multiple new products in the early stages of launch (e.g., Opdualag, Camzyos, Breyanzi, and Reblozyl), a robust new product pipeline (e.g., Deucravacitinib, Milvexian, and CELMoD agents), and a strong balance sheet combined with strong free cash flow generation that the company can use for acquisitions. Management believes these growth drivers can more than offset the loss of exclusivity and drive revenue growth through the end of the decade. Given the company’s low valuation, if the company can execute, we think there is substantial upside in the stock.”
11. Amgen Inc. (NASDAQ:AMGN)
Net Income TTM: $ 6.55 billion
Founded in 1980, Amgen Inc. (NASDAQ:AMGN) is a distinguished American biotechnology corporation operating across nearly 100 countries and regions worldwide, with a primary focus on six therapeutic domains: cardiovascular disease, oncology, bone health, neuroscience, nephrology, and inflammation. As per its 2021 annual report, ENBREL, and Prolia, were its most successful products.
On January 31, 2023, Amgen Inc. (NASDAQ:AMGN) announced its Q4 2022 result, reporting revenue of $6.84 billion, surpassing analyst’s expectations by $72.9 million. Additionally, the company’s EPS stood at $4.09, in-line with the market estimates.
As per Insider Monkey’s database, 60 hedge funds held stakes worth $2.2 billion in Amgen Inc. (NASDAQ:AMGN) in Q4 2022, compared to 53 funds in the prior quarter with stake worth $1.5 billion.
Here is what Smead Capital Management had to say about Amgen Inc. (NASDAQ:AMGN) in its third-quarter 2022 investor letter:
“Two things are very noticeable right off the top. First, sometimes you have to be happy losing less in a bear market environment so that you have more of your capital to grow in the next bull market. We are never really happy losing money. Second, 2022 is likely to be our third year of existence as a fund to lose money for the year. This year would join 2008 and 2018 in this undistinguished category. Our biggest detractors was dominated by Amgen (NASDAQ:AMGN). Consumer/investor fears about media and e-commerce hit WBD and EBAY and profit taking in Amgen came from early 2022 strength.”
10. Thermo Fisher Scientific Inc. (NYSE:TMO)
Net Income TTM: $6.95 billion
Thermo Fisher Scientific Inc. (NYSE:TMO) is a leading provider of research equipment, reagents, and biopharmaceutical services. The company’s laboratory products & biopharma services division accounted for 35% of the company’s revenue in 2021. Within this segment, Thermo Fisher Scientific Inc. (NYSE:TMO) maintains a renowned brand, PPD, which specializes in providing clinical research services to the biopharmaceutical sector.
On February 01, 2023, Thermo Fisher Scientific Inc. (NYSE:TMO) released its results for Q4 2022, reporting revenue of $11.45 billion, exceeding expectations by $1.04 billion. The company’s Normalized EPS beat market estimates by $0.20.
According to Insider Monkey’s database, 92 hedge funds held stakes worth $7.0 billion in Thermo Fisher Scientific Inc. (NYSE:TMO) in Q4 2022, compared to 92 funds in the prior quarter with stake worth $6.8 billion.
9. Novartis AG (NYSE:NVS)
Net Income TTM: $6.95 billion
Novartis AG (NYSE:NVS) is a distinguished Swiss multinational pharmaceutical corporation that employs approximately 108,000 professionals worldwide. Novartis’ Sandoz division has played a pioneering role in the biopharmaceutical industry as the first organization to secure approval for a biosimilar in Europe in 2006. Furthermore, the division provides biotechnology manufacturing services to other companies.
On February 01, 2023, Novartis AG (NYSE:NVS) reported its Q4 2022 result, reporting revenue of $12.69 billion, missing market estimates by $448 million. The Normalized EPS of $1.52 posted by the company beat market estimates by $0.09.
As per Insider Monkey’s database, 22 hedge funds held stakes worth $1.0 billion in Novartis AG (NYSE:NVS) in Q4 2022, compared to 26 funds in the prior quarter with stake worth $783 million.
Here is what Madison Investors Fund has to say about Novartis AG (NYSE:NVS) in its Q3 2022 investor letter:
“We sold our position in Novartis. We like the company’s track record of innovation, and its diversified portfolio of drugs. However, we’ve become increasingly concerned about the outlook for some of its recently launched therapeutics, as well as some generic competition in a few of its mature drugs. If pressed, we still like the odds that Novartis will do well, but the outlook is a little cloudier than it’s been in a while. As noted above, we’ve been big fans of its Alcon unit for many years, and now that Alcon is independent, we decided to concentrate our investment there.”
8. Novo Nordisk A/S (NYSE:NVO)
Net Income TTM: $7.97 billion
Novo Nordisk A/S (NYSE:NVO) is a multinational pharmaceutical corporation that operates across two therapy-based business segments: Diabetes & Obesity care and Rare Diseases (previously known as the biopharmaceutical division). Utilizing biotechnology, the company creates treatments for rare blood and endocrine disorders, as well as hormone replacement therapy. With production facilities in nine countries and research and development centers in five, Novo Nordisk markets its products to 170 countries worldwide.
On February 01, 2023, Novo Nordisk A/S (NYSE:NVO) reported its Q4 2022 result, reporting revenue of $7.10 billion, surpassing the analysts’ projection by $232.22 million. The Normalized EPS of $0.89 missed analyst’s projection by $0.03.
According to Insider Monkey’s database, 41 hedge funds held stakes worth $3.8 billion in Novo Nordisk A/S (NYSE:NVO) in Q4 2022, compared to 40 funds in the prior quarter with stake worth $2.8 billion.
7. BioNTech SE (NASDAQ:BNTX)
Net Income TTM: $ 11.02 billion
BioNTech SE (NASDAQ:BNTX) is a German biopharmaceutical company engaged in therapeutic areas of oncology and infectious diseases. BioNTech SE (NASDAQ:BNTX) developed the COVID-19 vaccine Comirnaty, the first-ever approved mRNA drug product, in collaboration with Pfizer. Currently, the company has 19 products in its clinical pipeline.
On November 07 2022, BioNTech SE (NASDAQ:BNTX) posted its Q3 2022 result, reporting revenue of $3.47 billion. The company reported a Normalized EPS of $7.0, beating analyst estimates by $3.57.
As per Insider Monkey’s database, 34 hedge funds held stakes worth $486 million in BioNTech SE (NASDAQ:BNTX) in Q4 2022, compared to 18 funds in the prior quarter with stake worth $185 million.
Artisan Partners made the following comment about BioNTech SE (NASDAQ:BNTX) in its Q3 2022 investor letter:
“BioNTech SE (NASDAQ:BNTX) is a leading biotech company focused on developing immunotherapies to treat cancer and other serious diseases. Over the past year, we trimmed our position significantly as we believed the stock’s valuation failed to reflect the windfall nature of COVID-19 vaccine cash flows. With the stock nearly 70% off its highs and, more importantly, at a reasonable discount to our PMV estimate, we view the valuation as opportunistic given its long-term profit cycle potential. BioNTech’s intellectual property in mRNA, and COVID funded manufacturing capacity leave it well-positioned to develop new mRNA vaccines and cancer therapies. In addition, the company has non-mRNA technology (e.g., cell therapy assets) and blue-chip partnerships offering additional optionality. While the company’s R&D pipeline beyond COVID-19 vaccines will take some time to mature, it is well funded by close to $20 billion in COVID-vaccine proceeds. We increased our position within the GardenSM as the stock declined.”
6. Moderna, Inc. (NASDAQ:MRNA)
Net Income TTM: $11.76 billion
Moderna, Inc. (NASDAQ:MRNA) is a biotech and pharmaceutical company based in the United States. The company specializes in RNA-based therapeutics, with a primary focus on mRNA vaccines. In 2020, the COVID-19 vaccine developed by Moderna was recommended by the U.S. Center for Disease Control and Prevention for use in individuals 18 years and older in the US. Moderna, Inc. (NASDAQ:MRNA) was granted full approval by the U.S. Food and Drug Administration last year.
On February 23, 2023, Moderna, Inc. (NASDAQ:MRNA) reported its Q4 2022 result, reporting revenue of $5.0 billion, beating market estimates by $64.6 million. The company reported Normalized EPS of $3.61, missing analysts’ expectations by $0.99.
According to Insider Monkey’s database, 52 hedge funds held stakes worth $3.0 billion in Moderna, Inc (NASDAQ:MRNA) in Q4 2022, compared to 44 funds in the prior quarter with stake worth $1.9 billion.
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Disclosure: None. 12 Most Profitable Biotech Stocks Today is originally published on Insider Monkey.
