2 growth stocks that are shamelessly crushing the bear market
It’s no surprise that investors covet stocks that can continue to rise when everything else in the market is falling. Most companies lack the special sauce it takes to reassure shareholders in times of economic uncertainty, and the few that do are likely to have impending catalysts for higher revenues or access to cash cow market segments that competitors do not have – or both.
In that vein, below are two biomedical growth stocks that are crushing the bear market. And both of these companies are poised for future success with their upcoming milestones and strong earnings performance, so they could be of interest to long-term investors.
Buoyed by a multitude of favorable clinical trial data readings and successes with regulatory authorities, Ionis Pharmaceuticals (IONS -0.83%) is up 16% this year while the market is down more than 13%. Although the company has three drugs on the market and its latest quarterly revenue was up 27.2% year over year, it is virtually unprofitable. But that could change relatively soon thanks to a particularly lucrative program nearing the end of its pivotal trials.
On June 21, the company announced that an interim analysis of its Phase 3 clinical trial of its drug candidate eplontersen had met the study’s two primary endpoints. This means that the chances of it being approved by regulators are quite good. Ionis hopes to file a New Drug Application (NDA) with the US Food and Drug Administration (FDA) later this year. Eplontersen is being studied for merit in the treatment of transthyretin-mediated hereditary amyloid polyneuropathy (ATTRv-PN), a rare and serious chronic disease.
More importantly for investors, management believes commercializing eplontersen would be worth billions of dollars a year at the peak of sales, and it’s also the company’s most lucrative short-term opportunity. Right now, Ionis’ last 12-month revenue is only around $840.7 million, so eplottersen’s contribution could be massive. In other words, it’s no surprise that Ionis is beating the bear market, as investors price in a likelihood of increased inflows from near-term approval.
At the same time, a few of his early-stage projects are also going great. On June 13, FDA regulators granted its application for orphan drug designation for its candidate called ION582, a drug intended to treat the rare inherited disease, Angelman syndrome. The orphan designation guarantees that he will get a few tax credits, a few clinical trial fee waivers, and ultimately more revenue from the eventual commercialization of ION582 than he otherwise could. However, it is currently only in phase 2 clinical trials. On July 28, the company announced positive results from a phase 2b trial of one of its anticoagulant treatments called fesomersen, paving the way for future development.
All in all, this is another positive development that could lead to more money being made down the line, and it certainly helps when the market is jittery about growth stocks like Ionis.
2. Jazz Pharmaceuticals
With a share up 18% this year, Jazz Pharmaceutical (JAZZ 1.13%) has no problem outperforming the stock market. Although currently not profitable, the company expects to achieve annual revenue of $5 billion in 2025, a significant increase from its $3.3 billion in revenue over 12 months.
To achieve this goal, it will leverage increased revenue from its recently launched drugs like Xywav, which treats idiopathic hypersomnia, a rare sleep disorder. Jazz has obtained orphan drug designation for Xywav, and it’s the only FDA-approved treatment for idiopathic hypersomnia, so it’ll have the market to itself for now — and most likely for some time. . This should be music to investors’ ears.
Separately, the company aims to bring its epilepsy drug Epidiolex to other markets in Europe, with France being the biggest on the list. Epidiolex is already approved in the United States, and bringing it to market in other countries will undoubtedly lead to greater revenue growth. First-quarter sales of the drug brought in $157.9 million, which management says is just the start of its scaling up. It will also work to study the drug for additional indications to potentially generate even more revenue in the future.
As if the prospect of a lot more sales in the near term weren’t enough to justify its outperformance, it will also return six different test records by 2024, each of them an opportunity for the title to rise on good new. Therefore, now could be a good time to buy the shares, especially given its progress to date in achieving its ambitions for the next few years.
Alex Carchidi has no position in the stocks mentioned. The Motley Fool fills positions and recommends Ionis Pharmaceuticals. The Motley Fool has a disclosure policy.