Top biotechnology stocks to explore in 2022

Highlights

• Prothena Corporation plc (NASDAQ:PRTA) has a P/E ratio of 46.05.
• Dynavax Technologies Corp’s (NASDAQ:DVAX) forward P/E for one year is 15.31.
• Ocugen, Inc. (NASDAQ:OCGN) stock grew 179.2% YTD. 

The biotechnology sector remained in focus in 2021 due to the pandemic. Vaccine development went into a war footing as companies developed drugs at a record pace. While more covid vaccines are still in the pipeline, Omicron’s advent has brought the sector back into focus and urgency among health professionals and officials.

Biotechnology companies have profited from the health crisis because of the increasing demand for medicines and other medical support. And as Omicron’s advent renews concerns, the biotechnology stocks will continue to catch investors’ attention in 2022.

Companies would see revenues swell in the new year, helped by improved demand for vaccines and ample cash in the coffers for redeployment. Experts believe these strong tailwinds would push the sector to new heights in 2022. Here we discuss five biotechnology companies that have cash and equivalents in millions, and their market capitalization is more than US$1 million.

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Prothena Corporation plc (NASDAQ:PRTA)

The Dublin, Ireland-based develops medicines for inflammatory disorders. 

The company earned revenue of US$199 million in the nine months ended Sept 30, 2021, compared to a mere US$493,000 in the same period of 2020.

The revenue came from collaboration and license and intellectual property-related income. Its net income was US$100 million or US$2.12 per diluted ordinary share for the period compared to a net loss of US$80.4 million or US$(2.02) per diluted ordinary share a year ago.

The cash and cash equivalents were US$601.5 million as of Sept 30, 2021, while the net cash from operating and investing activities amounted to US$114.8 million for the first nine months of 2021.

Prothena has a market capitalization of US$2.2 billion, with a P/E ratio of 46.05 and a forward P/E for one year of 30.02. The stock traded between US$79.75 and US$10.72 in the last 52 weeks. It closed at US$47.43 on Dec 27, 2021.

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Anavex Life Sciences Corp. (NASDAQ:AVXL)

The New York-based Anavex develops differentiated therapeutics. It analyzes genomic data to select patients for treating neurodegenerative and neurodevelopmental diseases. 

Its lead compound is ANAVEX 2-73, developed for diseases like Alzheimer's and Parkinson’s.

The company earned no revenue in fiscal 2021 ended Sept 30, 2021. Its cash and cash equivalents were US$152.1 million as of Sept 30, 2021, reflecting an increase of US$122.9 million from US$29.2 million on Sept 30, 2020.

The net income for FY 2021 is US$4.4 million compared to US$4.8 million in FY 2020. Its net loss was US$37.9 million, or US$(0.54) per share in FY 2021, compared to a net loss of US$26.3 million, or US$(0.45) per share diluted in FY 2020.

Its current market capitalization is US$1.45 billion. The AVXL stock traded between US$31.50 and US$5.12 in the last 52 weeks. It closed at US$19.10 on Dec 27, 2021.

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Dynavax Technologies Corporation (NASDAQ:DVAX)

The Emeryville, California-based Dynavax is a commercial-stage biopharmaceutical company. it leverages the body's innate immune response power to develop novel vaccines.

For the nine months ended Sept 30, 2021, the company posted revenue of US$244 million compared to US$27 million in the corresponding period of 2020.

The net loss was US$23 million or US$(0.20) per share diluted against a net loss of US$59.8 million or US$(0.65) per share diluted a year ago.

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The cash and equivalents were US$246 million as of Sept 30, 2021, versus US$32.69 million as of Sept 30, 2020. Dynavax has a market capitalization of US$1.72 billion, and a forward P/E one-year of 15.31. Its stock price fluctuated between US$21.39 and US$4.36 in the last 52 weeks and closed at US$14.39 on Dec 27, 2021.

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Ocugen, Inc. (NASDAQ:OCGN)

Ocugen Inc is a clinical-stage biopharmaceuticals company based in Malvern, Pennsylvania. It develops gene therapies for rare eye diseases and Covid-19 vaccines.

The company earned no revenue in the nine months ended Sept 30, 2021, and its net loss attributable to common shareholders was US$43.7 million or US$(0.23) per share diluted versus a net loss of US$30.6 million or US$(0.33) per share diluted in the same period of 2020. 

The cash and equivalents were US$107.35 million as of Sept 30, 2021, compared to US$24.04 million as of Dec 31, 2020. Ocugen’s current market capitalization is US$1.02 billion. Its stock traded in the range of US$18.77 to US$1.40 in the last 52 weeks. OCGN stock closed at US$5.11 on Dec 27, 2021.

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Image Description – Top biotechnology stocks to explore in 2022

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Avid Bioservices, Inc. (NASDAQ:CDMO)

It is based in Tustin, California. It develops biologics and provides testing, regulatory, bulk packaging support, etc., for clinical drug substance manufacturing.

For the six months ended Oct 31, 2021, its revenue was US$56.86 million, and the net income was US$9.86 million or US$0.15 per share diluted, versus revenue and net income of US$46.46 million and US$4.49 million, respectively for the first six months of 2020.

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The company had cash and an equivalent of US$163.67 million as of Oct 31, 2021.

Avid has a market capitalization of US$1.86 billion, a P/E ratio of 232.85, and a forward P/E for one year of 112.11. Its stock price traded in the range of US$34.51 to US$10.91 in the last 52 weeks. The stock closed at US$30.27 on Dec 27, 2021.

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Bottomline

The Nasdaq Biotechnology Index generated just 0.22% return YTD. But most companies involved in the covid vaccine development secured good bottom-line growth. All the aforesaid stocks generated more than 100% return YTD. However, investors should carefully analyze the companies and the overall market factors before investing in stocks.