We recently compiled a list of the 10 Best Genomics Stocks To Buy Right Now. In this article, we are going to take a look at where BioMarin Pharmaceutical Inc. (NASDAQ:BMRN) stands against the other genomics stocks.
Genomics is the study of genes and how they function. Many rapidly growing companies are emerging in the genomics field as technological advances substantially reduce the cost, accuracy, and time required to map a human being’s genome.
Investors in innovation, like Cathie Wood, the CEO of ARK Investment Management, believe that these developments are bringing about a “Genomic Revolution.” She stressed the potential of genomics and urged investors to see beyond conventional market benchmarks to seize revolutionary growth. On the eToro’s Digest & Invest podcast on October 21, 2024, Wood emphasized that concentrating only on the most prominent indexes may restrict exposure to ground-breaking innovation. She stated that reduced AI training costs have boosted genomics productivity, opening the door to important breakthroughs like gene editing that targets diseases. She is nevertheless optimistic about these stocks’ long-term worth, despite the present market reluctance and cash flow-driven tendencies made worse by ongoing high interest rates. According to Wood, avoiding this industry may result in missed opportunities as it progresses from development that relies heavily on investments to future profitability. She believes the market is changing and that early adopters will benefit from the convergence of genomics and AI.
Nonetheless, there have been encouraging breakthroughs from a number of genomic companies in 2024, and investors have seen financial rewards as the biotechnology sector of the broader market has risen by 29.33% since the beginning of the year.
According to Grand View Research, the global genomics market was estimated to be worth $32.65 billion in 2023 and is projected to grow at a compound annual growth rate of 16.5% between 2024 and 2030. Factors including the rising need for customized treatment, gene therapy, drug development, rising cancer rates, and a notable surge in consumer genomics demand in recent years are all contributing to the genomics market’s expansion. The pharmaceutical and biotechnology companies segment dominated the global genomic market in 2023, as per the aforementioned research. In terms of market share, North America held the biggest share in 2023 (42.65%), while Asia Pacific is anticipated to develop at the fastest rate during the forecast period.
The fields of gene editing and cell and gene therapies (CGTs) are also developing quickly. The UK approved Casgevy for sickle cell disease and β-thalassemia, pointing out the potential of CRISPR gene editing. According to Deloitte’s research report, the growing market for CGTs, from US$5.3 billion in 2022 to $19.9 billion in 2027, signals a shift towards customized advanced medicine despite high costs leading innovative business models. Furthermore, as per the report, GenAI can analyze a variety of information, such as clinical history, genomes, and social determinants of health, to produce deeper insights that have the potential to completely transform the way healthcare is delivered.
Looking forward, Chris Garabedian, CEO of Xontogeny and Venture portfolio manager at Perceptive Advisors, stated:
“I think 2024 will be a transition year, a little more carnage left and a clearing. There are signs of hope this year, and after the election and that uncertainty is behind us, I think we’re going to start to see 2025 look healthy.”
Methodology:
We sifted through holdings of Genomics ETFs and online rankings to form an initial list of 20 genomics stocks. Then we selected the 10 stocks that had the highest upside potential. The stocks are ranked in ascending order of the upside potential, as of November 14.
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)
A pharmaceutical plant manufacturing a proprietary synthetic oral form of a C-type natriuretic peptide.
BioMarin Pharmaceutical Inc. (NASDAQ:BMRN)
Upside potential as of November 14: 41.25%
BioMarin Pharmaceutical Inc. (NASDAQ:BMRN) focuses on treatments for rare diseases. Through their joint venture, Genzyme and BioMarin market Aldurazyme, while BioMarin sells Naglazyme, Vimizim, and Brineura on its own. Additionally, BioMarin sells Palynziq and Kuvan to treat PKU, a rare metabolic disorder. In 2021, VOXZOGO (vosoritide) received approval for achondroplasia. In 2022 and 2023, BioMarin’s Roctavian (a gene therapy for hemophilia A) received approval in Europe and the US, respectively.
It is challenging to avoid historical analogies with Genzyme (bought by Sanofi) as BioMarin Pharmaceutical Inc. (NASDAQ:BMRN) builds a portfolio of genetic disease therapies. Despite having several authorized treatments, BioMarin spent years in the red due to commercialization and R&D costs, but analysts have faith in the long-term, profitable potential of its current line of drugs. BioMarin is in a strong position because of its extensive internal pipeline and capacity to add expansion through strategic acquisitions.
BioMarin Pharmaceutical Inc. (NASDAQ:BMRN)’s third quarter of 2024 experienced revenues of $746 million, a 28% YoY growth primarily due to the robust VOXZOGO contributions from new patient beginnings across all markets. During the quarter, VOXZOGO’s revenue grew 54% year over year due to strong demand, while the portfolio’s revenues from enzyme therapies increased 27% year over year. In Q3 2024, the company generated $221 million in operating cash flows, a 63% increase YoY.
BioMarin Pharmaceutical Inc. (NASDAQ:BMRN) reaffirmed its 2027 revenue objective of about $4 billion and increased its full-year 2024 outlook due to the high demand for enzyme treatments and VOXZOGO.
On November 15, 2024, Wolfe Research commenced coverage of BioMarin Pharmaceutical Inc. (NASDAQ:BMRN) with an Outperform rating and a price target of $95. In a research note, the analyst informs investors that “there is a lot to like about shares at current levels,” citing the company’s new management, strong growth potential for lead asset Voxzogo, and its legacy Enzyme Replacement Therapy business, as well as the low downside risk following the recent share pullback.
Overall BMRN ranks 8th on our list of the best genomics stocks to buy. While we acknowledge the potential of the BMRN as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than BMRN but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock.
Disclosure: None. This article is originally published at Insider Monkey.
