Vertex, Neurocrine: Are These Out Of Favor Healthcare Stocks A Buy As Vaccine Nears?

IONS: Ionis Pharmaceuticals logo
IONS
Ionis Pharmaceuticals

Our indicative theme of Out Of Favor Healthcare Stocks Poised For Gains is down by about -13% year-to-date, compared to the S&P 500 which is up by about 2% over the same period.  This theme includes healthcare and pharmaceutical companies that have shown robust historical revenue growth and improving fundamentals, and yet have not rallied much this year due to Covid-19, which has reduced doctor visits and delayed patients from seeking care. Considering the relatively strong performance of these companies prior to the pandemic, and their focus on specialized therapeutic areas, they are likely to offer good returns in the medium to long-term. With a Covid-19 vaccine looking increasingly likely in the next few quarters, the narrative around many of these stocks could turn positive relatively quickly.  Below is a bit more on the companies in our Out Of Favor Healthcare Stocks Poised For Gains theme and their relative performance.

Vertex Pharmaceuticals (VRTX)  is a biopharmaceutical company that is best know for developing and commercializing therapies for the treatment of cystic fibrosis – a rare and life-limiting genetic disease. The stock is down by about -5% year-to-date.

VRTX

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Neurocrine Biosciences (NBIX) is a biopharmaceutical company that develops treatments for neurological and endocrine-related diseases and disorders. The stock is down by about -8% year-to-date.

Arrowhead Research (ARWR) is a biopharmaceutical company that focuses on treatments for Hepatitis B and cardiovascular disease. The stock is down by roughly -10% this year.

BioMarin Pharmaceutical (BMRN) is a biotech company focused on enzyme replacement therapies. The stock has declined -12% this year.

Alkermes (ALKS) is a biopharmaceutical company that focuses on drugs for diseases in the central nervous system including schizophrenia and multiple sclerosis. The stock is down by about -20% year-to-date.

Ionis Pharmaceuticals, Inc. (IONS) is a biotech company that specializes in discovering and developing RNA-targeted therapeutics. The stock has dropped -22% this year.

What if you’re looking for a more balanced portfolio instead? Here’s a high-quality portfolio to beat the market, with over 100% return since 2016, versus about 50% for the S&P 500. Comprised of companies with strong revenue growth, healthy profits, lots of cash, and low risk, it has outperformed the broader market year after year, consistently.

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