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Highlights
- The Omicron virus has renewed focus on the healthcare sector.
- WHO has warned not to let the guards despite lower hospitalization rate.
- The Nasdaq Biotechnology Index fell around 19% in one year.
The hospitalization rate for Omicron has dropped in most US states recently, although concerns remain. The World Health Organization (WHO) has warned not to ease restrictions.
There is a fresh fear that a more virulent but less severe subvariant of Omicron might be on the lurk. These developments would keep the healthcare industry, especially those dealing with Covid-19 vaccines, in high gear, offering an opportunity for investors to explore options.
Recently, Moderna Inc has received full approval from the US FDA for its Covid-19 vaccine for 18 years old and older. It is the second fully approved Covid-19 vaccine in the US.
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Many healthcare companies have also stepped up drug development for diseases like cancer. The US annual healthcare spending is expected to reach US$6 trillion by 2028.
Here we discuss Nasdaq's top seven healthcare stocks based on their market cap.
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Amgen Inc. (AMGN)
Market Cap: US$129 billion
Closing price on February 01, 2022: US$228.68
One year return: -4.9%
Thousand Oaks, California-based Amgen is a biotechnology company specializing in cancer care and renal disease products.
For the three months ended September 30, 2021, its revenue was US$6.7 billion versus US$6.4 billion in the same period in 2020.
The net income was US$1.88 billion or US$3.31 per share diluted for the September quarter, against US$2.02 billion or US$3.43 per share diluted a year ago.
Amgen’s P/E ratio is 23.56, and the current dividend yield is 3.1%, with an annualized dividend of 7.76.
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Intuitive Surgical, Inc. (ISRG)
Market Cap: US$104 billion
Closing price on February 01, 2022: US$286.51
One year return: 13.42%
Intuitive Surgical is based in Sunnyvale, California. It is focused on advancing patient care in surgery and other medical interventions. The company develops and markets a robotic system for improving the quality and access of minimally invasive surgery.
For the quarter ended December 31, 2021, it earned revenue of US$1.55 billion, up 17% from products and services versus US$1.33 billion in the previous year quarter. It booked GAAP net income attributable to Intuitive of US$381 million or US$1.04 per share diluted compared to US$365 million or US$1.01 per share diluted in Q4, 2020.
Its P/E ratio is 62.57, and the forward P/E for one year is 72.90.
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Gilead Sciences, Inc. (GILD)
Market Cap: US$81.57 billion
Closing price on February 01, 2022: US$68.47
One year return: 5.13%
Gilead Sciences is based in Foster City, California. It develops and markets therapies for life-threatening infectious diseases.
The company declared its Q4 and full-year 2021 results on February 1. Its Q4, 2021 revenue was US$7.2 billion, down 2% YoY.
The full-year 2021 revenue came in at US$27.3 billion, up 11% YoY. The company reported earnings per share diluted of US$4.93 for FY 2021 compared to US$0.10 in FY2020.
Its P/E ratio is 13.19, the dividend yield is 4.14%, and the annualized dividend is US$2.84.
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Moderna, Inc. (MRNA)
Market Cap: US$67.56 billion
Closing price on February 01, 2022: US$172.74
One year return: 8.9%
Moderna is a biotechnology company headquartered in Cambridge, Massachusetts. Its mRNA technology proved useful, validated with its Covid-19 vaccine in 2020.
For the September quarter of 2021, it booked a net income of US$3.33 billion or US$7.70 per share diluted on revenue of US$4.97 billion. The revenue was US$157 million, and the net loss was US$233 million or US$0.59 per share diluted in the quarter.
Its P/E ratio is 10.22, and the forward P/E for one year is 6.37.
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Regeneron Pharmaceuticals, Inc. (REGN)
Market Cap: US$65.3 billion
Closing price on February 01, 2022: US$613.36
One year return: 22.68%
Tarrytown, New York-based Regeneron Pharmaceuticals develops drugs for cancer, inflammation, eye, and cardiovascular diseases.
Regeneron posted revenue of US$3.45 billion in the September quarter of 2021 and a net income of US$1.63 billion or US$14.33 per share diluted. The revenue and net income were US$2.29 billion and US$0.842 billion, respectively, for the same period in 2020.
Its P/E ratio is 9.69, and the forward P/E for one year is 9.16.
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Vertex Pharmaceuticals Incorporated (VRTX)
Market Cap: US$63.7 billion
Closing price on February 01, 2022: US$245.66
One year return: 13%
Vertex Pharmaceuticals is a biotechnology company. The company develops small-molecule drugs for serious diseases. It is headquartered in Boston, Massachusetts.
On January 26, it released the Q4 and full-year 2021 earnings results. Its product revenue for the fiscal year ended December 31, 2021, increased 22% YoY to US$7.57 billion.
The GAAP net income was US$2.34 billion or US$9.01 per share diluted compared to US$2.71 billion or US$10.29 per share diluted in FY 2020.
Its P/E ratio is 27.72, and the forward P/E for one year is 19.94.
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Source - pixabay
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Illumina, Inc. (ILMN)
Market Cap: US$55.52 billion
Closing price on February 01, 2022: US$356.45
One year return: -19%
San Diego, California-based Illumina provides tools and services for analyzing genetic material with life science and clinical lab applications.
The company will announce Q4 and full-year results on February 10, 2021.
For the three months ended October 3, 2021, the company posted revenue of US$1.11 billion compared to US$0.794 billion in 2020. Its net income came in at US$317 million or US$2.08 per share diluted versus US$179 million or US$1.21 per share diluted in the previous year.
Its P/E ratio is 58.33, and the forward P/E for one year is 62.98.
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Bottomline
The Nasdaq Biotechnology Index fell around 19% in one year, contrasting the Nasdaq Composite Index's 5% growth in 12 months. Companies involved in Covid drug manufacturing saw significant growth last year.
