Investors have shown keen interest in biotech after Johnson & Johnson’s (NYSE:JNJ) impressive earnings beat that topped Wall Street’s expectations. The earnings beat reignited enthusiasm for biotech stocks, prompting investors to search for the next big players.
The pharmaceutical giant’s adjusted earnings and revenue beat expectations, with strength reported in units including pharmaceuticals. J&J also raised its full-year guidance, reflecting its convincing performance.
In the first quarter, sales grew by 5.6% versus last year, providing a positive outlook for the broader health industry. J&J’s earnings beat is encouraging despite talc liabilities and the upcoming spinoff of its consumer health business.
Biotech companies are leading the charge in developing groundbreaking treatments and therapies for diverse medical conditions and diseases. With the global population aging and rising healthcare spending, biotech stocks are well-positioned to benefit from these trends.
This article spotlights three biotech stocks investors should watch following Johnson & Johnson’s earnings beat. These stocks have promising prospects for biotech growth, with strong earnings potential.
By investing in these biotech winners, investors can position themselves to take advantage of the ongoing success of the biotech industry.
Axsome Therapeutics (AXSM)
Axsome Therapeutics (NASDAQ:AXSM) was among the top-performing stocks last year, soaring more than 100% and outpacing the bear market.
The biotech firm was on the cusp of a significant milestone with the launch of its first products. However, the demand for shares has waned, and the stock has dipped since the beginning of the year.
Axsome Therapeutics has been one of the biotech winners in recent years. Hence, despite slipping since the start of the year, investors should note the exciting developments in the company’s pipeline.
In October 2022, Axsome launched Auvelity, a treatment for major depressive disorder.
The company is evaluating AXS-05’s effectiveness in managing Alzheimer’s disease agitation and smoking cessation, with three other candidates targeting migraine, narcolepsy, and fibromyalgia. This diversified pipeline presents investors with multiple growth opportunities.
The overall biotech market has been on the rise, with Johnson & Johnson earnings exceeding expectations and overall biotech earnings showing vigorous growth. This is a positive trend for the industry and suggests potential for Axsome’s growth.
With two drugs potentially hitting the market soon, Axsome Therapeutics will take advantage of biotech growth.
The company plans to resubmit AXS-07 for FDA approval in H2 2023 and file for approval of AXS-14 the same year. With Auvelity peak sales forecast at $2.6B and AXS-07 at over $500M, Axsome is an attractive Biotech Stock.
Investors looking for exposure to the biotech industry and seeking a promising growth stock should consider Axsome Therapeutics.
The company’s diversified pipeline and the positive industry trend make it an attractive opportunity for biotech growth.
Intellia Therapeutics (NTLA)
Intellia Therapeutics (NASDAQ:NTLA) pioneers CRISPR gene editing but lacks products in the market. The company’s pipeline is promising.
Intellia Therapeutics’ lead pipeline candidate is NTLA-2001. It announced positive interim results in November 2022 from a phase 1/2 study evaluating the drug for treating transthyretin amyloidosis with cardiomyopathy (ATTR-CM), a rare genetic heart disease.
By the end of 2023, Intellia and Regeneron plan to commence a pivotal clinical trial.
Intellia reported encouraging interim outcomes in November 2022 from a phase 1/2 investigation into NTLA-2002’s efficacy in treating hereditary angioedema, a rare inherited disorder. The company now aims to proceed with phase 2 testing in the US after reaching that stage in New Zealand.
Intellia is looking to file for regulatory approval by H2 2023 to start early-stage clinical trials of NTLA-3001. The treatment addresses alpha-1 antitrypsin deficiency (AATD), an uncommon genetic liver ailment. The positive developments in Intellia’s pipeline suggest promising prospects for biotech growth.
CRISPR Therapeutics (CRSP)
Although CRISPR Therapeutics (NASDAQ:CRSP) has fallen behind the market lately, the potential of its drug Exa-cel as a treatment for sickle cell disease and transfusion-dependent beta-thalassemia presents reasons for hope.
Clinical trial data suggest that the treatment is effective for both conditions. It has been submitted for regulatory approval in both the U.S. and Europe. Analysts believe that regulatory approval is likely by early 2023.
With an initial market of 32,000 patients suffering from SCD and TDT in the US and Europe, Exa-cel holds significant revenue potential, representing a $64 billion opportunity at a treatment price of $2 million.
While competition exists, CRISPR Therapeutics’ partnership with Vertex Pharmaceuticals gives it an advantage regarding launch strategy and funding.
The pricing of Exa-cel, however, is a concern. Third-party payers may not be willing to cover such expensive treatments, as Bluebird Bio discovered with Zynteglo, a gene-editing medicine with a $2.8 million price tag. CRISPR Therapeutics and Vertex Pharmaceuticals have discussed pricing with insurance companies and Medicaid, and their launch strategy will consider payer feedback.
Given its lack of commercial-stage products, CRISPR Therapeutics’ current market capitalization of $4 billion seems fair. However, the potential revenue generated from exa-cel could lead to significant growth in the company’s market capitalization.
Even more, the sustained revenue generated from exa-cel could enable CRISPR Therapeutics to continue advancing its other programs, leading to further growth in the future. With its innovative potential and prospects for biotech growth, CRISPR Therapeutics is a stock to consider buying in 2023.
That does it for this list. Hope you enjoyed reading about some of the top biotech stocks out there! If you want to continue reading about biotech companies, my colleagues Chris Markoch and Ian Cooper have written great pieces worth reading.
On the publication date, Faizan Farooque did not hold (directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.