3 Top Biotech Stocks to Buy This Month

Over the last few decades, personalized medicine has transformed the healthcare industry with treatments tailored for individual patients. At the same time, the development of orphan drugs, which are specialized treatments for rare diseases, has burgeoned, with many new formulations in clinical trials.

These advancements are creating fresh opportunities within the biotechnology industry and attracting innovative new biotech companies.

Strong government backing is also driving the industry forward with updates in the regulatory environment and new standards for clinical research. Approval processes and reimbursement rules have also become simpler.

These trends point to investment potential in pharmaceutical and biotech companies. So what are the top biotech stocks to buy this month? Pfizer, Moderna and BioNTech all offer considerable potential during the summer doldrums before seasonal spikes create demand during the winter season.

Pfizer Has Growth Levers

Pfizer Inc. (NYSE:PFE) has been around for almost two centuries but really came to prominence in recent years for developing mRNA treatments alongside Moderna.

Its products and treatments range from Chapstick® for dry, chapped lips to medicines for cancer, heart disease, reproductive health, and infectious diseases, among others.

Pfizer has also developed drugs and vaccines in many treatment areas, including Paxlovid™ for COVID-19, an RSV or respiratory syncytial virus vaccine for adults, and biosimilars for long-term immune and inflammatory illnesses.

The biotech firm continues to build on its 175-year history of making important medical and pharmaceutical discoveries. Over 119 million patients received medicines and vaccines from the company in the first three months of this year.

In the first quarter of 2024, Pfizer’s revenues from oncology increased by 19% compared to last year. This growth was partly due to the acquisition of four in-line products from the Seagen company. In addition, PADCEV had a strong new launch for treating metastatic urothelial cancer.

The company is also seeing more demand for XTANDI, which remains a key therapy in treating prostate cancer. Plus, it is seeing growth with LORBRENA, a drug that may become the primary choice for the initial treatment of ALK-positive metastatic non-small-cell lung cancer.

Recently, the company shared news about receiving full FDA approval for TIVDAK to treat recurring or metastatic cervical cancer. This makes TIVDAK the first antibody drug to offer patients a good chance of survival, and may prove to be a strong growth catalyst.

With all those positives stated, Pfizer’s revenues came in at $14.88 billion while income from operations was $3.13 billion. 

Moreover, the company earns high marks for efficiencies as evidenced by the stock’s trailing 12-month EBITDA margin of 17.53%, which eclipses market rivals by a huge degree. The trailing 12-month levered FCF margin of 6.31% is also way above industry averages.

For this fiscal year, Pfizer’s revenues are forecast to rise by 3.5%, and land at $60.51 billion while earnings per share are predicted to rise by 28.6% and reach $2.37 per share. The company has also performed better than expected in EPS over three of the last four quarters.

Next year, analysts expect revenues to grow by 3.7% while EPS is set to increase by 16.6% compared to 2024. The anticipated figures are $62.75 billion and $2.76, respectively.

Analysts are optimistic about Pfizer’s stock prospects and forecast a rise of 12.9% to reach a target price of $32.87 per share.

Moderna Way Undervalued Relative To Price Target

Moderna, Inc. (NASDAQ:MRNA) is the poster child biotech firm for mRNA treatments, meaning messenger RNA drugs and vaccines that are designed to cure and prevent diseases, including infections, autoimmune disorders, and cardiovascular diseases.

With numerous programs in the late stages and many others moving toward important clinical trials, management has signaled its belief in future vaccines and treatments beyond its flagship one. Nonetheless, the primary focus remains on Moderna’s vaccines and mRNA drugs.

Moderna has been remarkably successful at distributing across borders. For example, in July 2024, Moderna and Mitsubishi Tanabe Pharma Corporation agreed to work together to promote Moderna’s mRNA respiratory vaccines in Japan, including Moderna’s COVID-19 vaccine Spikevax®.

Under the agreement, Moderna will be responsible for manufacturing, sales, medical education, and distribution of its mRNA respiratory vaccines. 

Also, in May, Moderna’s leadership stated that the U.S. Food and Drug Administration (FDA) approved MRESVIA (mRNA-1345), an mRNA vaccine designed to protect adults 60 years of age and older from lower respiratory tract illness caused by respiratory syncytial virus infection.

The approval was given under a breakthrough therapy designation and is the second mRNA product for which Moderna has received approval, a development that bodes well for the firm.

Turning to the financials. In Q1 2024, Moderna’s revenues came in at $167 million but what remains impressive is the company’s massive cash pile of $2.05 billion. Indeed the balance sheet looks very sturdy with total current assets of $9.60 billion.

For the fiscal year ending December 2025, Moderna’s revenue is slated to rise by 15.8% to $4.81 billion. In addition, Moderna has surpassed the forecasted revenue in the previous four quarters and analysts expect good things for Moderna shareholders. The consensus estimate is for the share price to rise by over 44% to reach the $144.31 price target.

BioNTech SE

BioNTech SE (NASDAQ:BNTX) is a less familiar name but also ranks as a top biotechnology company that develops and delivers new treatments for cancer and infectious diseases. One of its main projects is BNT111, which is in advanced clinical trials to treat melanoma. Another important project is BNT112, targeting prostate cancer.

In June, BioNTech SE and DualityBio announced that the FDA gave Fast Track status to BNT324/DB-1311 for treating advanced prostate cancer. This approval shows good promise in BioNTech’s ADC candidate, increasing the company’s market standing.

Like Moderna, BioNTech has been making waves overseas. For example, it has committed up to $145 million to build mRNA vaccine research and development as well as manufacturing facilities in Kigali, Rwanda.

It’s also got a presence in Kigali, a factory that officially started in December 2023. Operations include advanced bioNTainers to make mRNA vaccines, which is a big step for biotechnology in Africa. 

BioNTech’s start to the year was modest, though. For the first quarter of fiscal 2024, BioNTech earned €187.60 million ($203.01 million) in revenue.

The company’s total non-current assets reached €3.98 billion ($4.31 billion), higher than €3.48 billion ($3.76 billion) on December 31, 2023. Current assets were reported at €18.27 billion ($19.78 billion).

The standout metric on the financials is the margins. The stock’s trailing 12-month gross profit margin is 79.38%, higher by 38.4% than the industry’s usual 57.37%. The company’s trailing 12-month levered FCF margin of 157.44% and compares favorably to the sector average of 1.31%.

Looking at the fiscal 2024 fourth quarter, analysts are expecting BioNTech’s revenue will go up by 26.8% while earnings per share is set to rise by 48.5% compared to last year to $3.08 per share.

Analysts are largely upbeat about BioNTech stock with expectations that the stock will rise to $111 per share.

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The author has no position in any of the stocks mentioned. Financhill has a disclosure policy. This post may contain affiliate links or links from our sponsors.