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UKRAINE – 2021/06/11: A Sarepta Therapeutics logo is visible on a smartphone… [+] and a computer screen in this photo illustration. (Image courtesy of Pavlo Gonchar/SOPA Images/LightRocket/Getty Images)
Getty Images/SOPA Images/LightRocket
Out Of Favor is our subject. Health Care Stocks is a collection of healthcare and pharmaceutical companies whose financial performance and stock price returns are at odds. The theme screens for healthcare firms that have increased sales by at least 50% in the last three years while simultaneously increasing operating margins, but have seen their stock return less than 10% since early 2020. Overall, the theme is down by approximately 29% year to date, compared to the S&P 500, which is up by roughly 15%. However, with the number of coronavirus cases in the United States declining and healthcare spending in regions other than Covid expected to rise, the stocks in our theme should experience some upside. Furthermore, a larger market shift away from highly valued equities and toward value picks could benefit the stocks in our theme. Here’s some more information on how some of the stocks in our subject have performed. Sarepta Medicines, which produces RNA-targeted therapeutics and gene therapy for the treatment of uncommon diseases, has seen its stock fall by 54% year to date. The drop is due to negative results from clinical trials for one of the company’s medications, SRP-9001, which is used to treat Duchenne muscular dystrophy. The sell-off, however, appears to be exaggerated, as the stock has seen some good developments, including the approval of Amondys 45, a medicine used to treat some DMD patients. In addition, the business is developing a number of other medications that will likely help it acquire market share in the DMD therapy area in the future years.
Vertex Pharmaceuticals’ stock is down nearly 17% year to date, owing in part to the company’s decision to stop developing VX-864 for alpha-1 antitrypsin deficiency after phase 2 trials, citing that the medicine was unlikely to produce significant therapeutic benefit. However, the company’s most important medicine, a three-in-one pill known as ‘Trikafta,’ which is used to treat Cystic Fibrosis, has been gaining pace, with revenues of $3.9 billion in its first full year of sales in 2020. As sales increase, the stock could gain.
Neurocrine Biosciences is a biopharmaceutical business focused on the development of medicines for neurological and endocrine illnesses. Luvadaxistat’s phase two research failed to meet its primary aim of alleviating the negative symptoms of schizophrenia, hence the stock has been relatively unchanged this year. Furthermore, the company’s first FDA-approved medicine, Ingrezza, a therapy for Tardive Dyskinesia, ran into challenges as a result of the Covid pandemic, which hampered new patient enrollment. However, with Covid cases down from their highs and more than half of all adults in the United States immunized, Ingrezza’s sales may improve. Peak sales are expected to be more over $2 billion, up from $993 million in 2020.
[5/27/2021] Is It Worth Investing In These Healthcare Stocks?
Our Out Of Favor Health Care Stocks theme includes healthcare and pharma stocks that have performed reasonably well financially in recent years, but whose stock prices have fallen or underperformed due to setbacks in their development pipelines or disruptions in the healthcare industry caused by Covid-19. The theme is down around -33% year to date, compared to the S&P 500, which is up roughly 12% in the same time frame. Below is some additional information about some of the firms in our theme, as well as the reasons for their underperformance and why we believe they may be on the verge of recovering.
ACADIA Pharmaceuticals, a biopharmaceutical firm specialized on neurological medications, has been the theme’s poorest performer, with its stock down 59 percent year-to-date. The company’s flagship medicine Nuplazid, which is presently used to treat hallucinations linked with Parkinson’s disease psychosis, had a requested label expansion as a treatment for dementia-related psychosis rejected by the FDA in March. Nuplazid continues to have great demand for PDP therapy, so there’s still room for growth. ACADIA also stated that it will engage with the FDA to clarify differences in its application for the treatment of dementia-related psychosis.
The shares of Emergent Biosolutions, a speciality biopharmaceutical business, has dropped by nearly 36% this year. The drop comes after the business acknowledged that a “human error” in its Baltimore factory contaminated a batch of Johnson & Johnson’s (NYSE: JNJ) Covid-19 vaccines that it was assisting in the production of. The FDA requested that the company halt production while they investigated the plant, making nine observations, most of which were related to quality issues. However, the worst appears to be behind EBS stock now, with the business recently announcing that it was working to resolve the issues, with production expected to restart “within days.” Given the present pandemic and global vaccine scarcity, demand for the company’s services is likely to remain strong. Revenue growth is expected to be around 16 percent this year, according to consensus projections.
Vertex Pharmaceuticals’ stock has dropped roughly 12% year to date, owing to inconsistent quarterly results and the company’s decision last year to stop developing VX-814, a medicine that was being studied as a potential treatment for alpha-1 antitrypsin insufficiency. However, the company’s most important medicine, a three-in-one pill known as ‘Trikafta,’ which is used to treat Cystic Fibrosis, has been gaining traction, generating $3.9 billion in its first full year of sales in 2020, and Vertex stock might profit as sales ramp up even more.
[4/14/2021] Out-of-Favor Healthcare Stocks to Keep an Eye On
Out of Favor Health Care is our theme. Stocks are healthcare and pharmaceutical companies that have done quite well financially in recent years, despite their stock prices declining or underperforming, due to Covid-19-related upheavals in the healthcare industry or delays in their development pipelines. The theme is down roughly -26% year to date, compared to the S&P 500, which is up about 10% in the same time frame. Here’s some more information on how some of the stocks in our subject have performed.
Vertex Pharmaceuticals’ stock is down approximately 3% year to date, owing to disappointing Q4 results and the company’s decision last year to stop developing VX-814, a medicine that was being studied as a potential treatment for alpha-1 antitrypsin insufficiency. However, the company’s most important medicine, a three-in-one pill known as ‘Trikafta,’ which is used to treat Cystic Fibrosis, has been gaining pace, with revenues of $3.9 billion in its first full year of sales in 2020. As sales increase, the stock could gain.
Neurocrine Biosciences is a biopharmaceutical business focused on the development of medicines for neurological and endocrine illnesses. The stock has been hit by headwinds this year, falling approximately 14% year to date after the phase two research of Luvadaxistat failed to meet its primary aim of reducing negative symptoms of schizophrenia. Furthermore, the company’s first FDA-approved medicine, Ingrezza, a therapy for Tardive Dyskinesia, ran into challenges as a result of the Covid pandemic, which hampered new patient enrollment. Ingrezza’s sales may improve now that Covid cases are down from their highs and vaccines are on the rise. Peak sales are expected to be more over $2 billion, up from $993 million in 2020.
Centene is a full-service managed services firm that works with both government-sponsored and private insurance-sponsored health-care programs. Due to uneven quarterly earnings and some headwinds from Covid-19, the stock has stayed practically flat year to date. The stock, on the other hand, may enjoy rises in the medium term. Insurance businesses that specialize in government-sponsored Medicaid health programs may benefit, since President Joe Biden supports Obamacare, and prospective healthcare reforms by Democrats could benefit Centene.
[3/16/2021] Stocks in the Health-Care Industry That Aren’t Performing Well Stocks in the Health-Care Industry That Aren’t Stocks include healthcare and pharmaceutical companies that have done well financially in recent years, despite their stock prices lagging due to Covid-19-related disruptions in the healthcare business or difficulties in their development pipelines. However, investors have been reallocating assets from pricey, high-growth tech stocks to value stocks and companies that may benefit when the Covid-19 outbreak fades in recent weeks, resulting in major sector rotation in the broader markets. Some of the names in our theme are expected to gain from this trend as well. Here’s a little additional information about some of these businesses and how they’ve fared this year.
Centene is the largest Medicaid Managed Care Organization and a supplier of managed healthcare plans. Due to uneven quarterly performance and some headwinds from Covid-19, the stock is down around 2% year to date. However, with Covid-19 infections in the United States on the decline in recent weeks and Democrats gaining a governing trifecta in the United States, the company could experience gains in the medium run.
Neurocrine Biosciences is a biopharmaceutical business focused on the development of medicines for neurological and endocrine illnesses. Due to the Covid pandemic, which is affecting new patient beginnings, the company’s first FDA-approved medicine, Ingrezza, a therapy for Tardive Dyskinesia, is encountering headwinds. Year to date, the stock is down around -16 percent.
Sarepta Therapeutics’ stock has dropped nearly 35% since early January due to disappointing results from clinical trials for SRP-9001, a medication used to treat Duchenne muscular dystrophy. The sell-off, however, appears to be exaggerated, as the stock has seen some good developments, including the approval of Amondys 45, a medicine used to treat some DMD patients.
Take a look at our theme. Healt Is Out Of Favor/nRead More

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