In 2021, the biotech sector remained in the spotlight. It played a critical role in putting the pandemic under control by developing COVID-19 vaccinations.
In addition, the sector’s expansion in 2021 was aided by solid quarterly results, new product introductions, and regular M&A activity.
The pandemic, however, is far from over, especially because the virus’s extremely infectious Omicron form has already spread to a number of nations. As a result, biotech companies will remain the focus of interest in 2022.
Therefore, for investors looking for a high-growth choice while also being ready to take on some additional risk, the biotech industry presents an unrivaled opportunity.
With this in mind, we examined TipRanks’ database to find two biotech stocks that fit the bullish profile: a solid portfolio and a Strong Buy consensus rating.
Here’s the scoop.
Eli Lilly & Co.
Let’s begin with Eli Lilly & Co. (LLY), one of the top pharmaceutical companies in the world. Lilly’s pipeline assets for cancer, diabetes and Alzheimer’s disease are all attractive.
Dual GIP and GLP-1 receptor agonist for type 2 diabetes, and donanemab, a treatment for early Alzheimer’s disease, are two promising pipeline prospects. Both candidates have the potential to deliver strong sales numbers. Both are anticipated to be approved next year.
Furthermore, due to increased projected revenues from its COVID-19 antibody drugs, Lilly upped its previously disclosed 2021 sales and earnings expectations earlier this month. In addition, Lilly’s financial outlook for 2022 surpassed expectations: Lilly expects 2022 revenue to be between $27.8 billion and $28.3 billion. On February 3, the company is expected to release its upcoming earnings.
Trulicity and Jardiance (for treating Type 2 diabetes), along with Verzenio (an oncology drug), Taltz (an immunology drug), and other drugs, are expected to account for more than two-thirds of core sales in 2022, according to the company. Further, the expected launch of tirzepatide (a diabetes drug) and donanemab (an Alzheimer’s drug) products should further drive sales in the near future.
Furthermore, Lilly is on track to introduce 20 new drugs between 2014 and 2023, having already introduced 16 new medicines in the previous eight years.
In response to the strong guidance provided by the management, Kerry Holford of Berenberg Bank rates Eli Lilly shares a Buy and increased the price target to $305 from $270. This figure suggests room for ~12% upside for the coming year.
Eli Lilly has a Strong Buy consensus rating from Wall Street analysts, with 12 recent assessments, including 9 Buys and 3 Holds. The stock is now trading at $273.1 and the average LLY price target of $291.75 implies around 7% upside from that level.
AbbVie
Second is AbbVie (ABBV), a biopharmaceutical firm that focuses on discovering and selling complete treatments for some of the world’s most complex and severe diseases.
Imbruvica and Venclexta, the company’s cancer medications, have been successful in increasing their labels. The company also has a number of novel medications in its pipeline that have the potential to boost income. It has a strong late-stage pipeline, with numerous early-stage and mid-stage candidates with blockbuster potential.
The business has been aggressively exploring partnerships and collaborations for candidates in immunology, cancer, aesthetics, neurology, eye care, and women’s health, among other therapeutic areas. AbbVie’s revenue base has been broadened into new therapeutic areas as a result of the acquisition of Allergan, improving its long-term growth prospects.
Furthermore, due to its diverse product offering and long-term dividend growth track record, the company is a popular choice among investors. Abbvie has been growing its dividend for the past 9 years, and boasts a payout ratio of 42.2%.
On the analyst side, BMO Capital analyst Gary Nachman maintained a Buy rating and a price target of $134.00.
AbbVie has a Strong Buy consensus rating from Wall Street analysts, with 14 recent assessments, including 11 Buys and 3 Holds. The stock is now trading at $133.09 and the average ABBV price target of $133.00 implies that shares are fully valued at current levels.
Disclosure: At the time of publication, Shalu Saraf did not have a position in any of the securities mentioned in this article.
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