The biotech sector witnessed a see-saw performance in 2024. While the year started on a positive note, much of the gains slowed down in the second half of 2024. The downside in the second half was due to overall disappointing third-quarter results, guidance cuts and pipeline setbacks. The sector has declined 9.5% in the past six months, underperforming the S&P 500 index, as seen in the chart below.
Zacks Investment Research
Image Source: Zacks Investment Research
Nonetheless, given the continuous need for innovative medicines, the biotech industry will continue to grab investors’ interest despite the inherent volatility and uncertain macroeconomic environment.
Innovation is likely to drive growth in the industry, with key spaces like obesity and oncology drugs attracting attention. M&A activity should remain strong in 2025. Overall fundamentals of the sector remain strong and investors are expected to come back to this space eventually.
Here, we discuss four biotech stocks that have returned 50% or more year to date and have room for more growth in 2025 on the back of a solid portfolio and a promising pipeline. These are ADMA Biologics, Inc. ADMA, Tarsus Pharmaceuticals, Inc. TARS, Stoke Therapeutics, Inc. STOK and ChromaDex Corporation CDXC. The stocks have outperformed the industry this year, as seen in the chart below:
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Image Source: Zacks Investment Research
ADMA Biologics
ADMA Biologics markets plasma-derived biologics for treating immune deficiencies and preventing certain infectious diseases. The company’s top line currently comprises sales of three FDA-approved products — Bivigam (an Intravenous Immune Globulin [“IVIG”] product to treat primary humoral immunodeficiency), Asceniv (to treat primary immunodeficiency disease or PIDD) and Nabi-HB (to treat and provide enhanced immunity against the hepatitis B virus).
Asceniv is a plasma-derived IVIG that contains naturally occurring polyclonal antibodies. Its strong sales growth is driving the top line. The ongoing post-marketing study for Asceniv may provide a label expansion opportunity to include pediatric-aged PI patients. A potential label expansion of Asceniv should drive near-term revenue growth.
The company is working to increase Asceniv's supply. If successful, Asceniv will account for a significant portion of ADMA's total revenues over time, further advancing its potential margin expansion and earnings growth.
ADMA has put up a stellar performance in 2024, buoyed by strong quarterly performances and a consecutive increase in guidance. Shares have skyrocketed 292% so far in 2024.
The stock currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Estimates for ADMA’s 2025 earnings per share have increased from 64 cents to 78 cents over the past 60 days.
Tarsus Pharmaceuticals
Tarsus Pharmaceuticals currently markets Xdemvy (lotilaner ophthalmic solution) 0.25%, a novel eye drop approved for treating Demodex blepharitis. The eye drop was approved by the FDA in 2023 and has witnessed a robust sales uptake so far.
Xdemvy generated sales worth $113.7 million in the first nine months of 2024. Around 104,400 bottles of Xdemvy were delivered to patients during the same time. Per management, Xdemvy launch continues to accelerate owing to growth in prescription volumes.
The company’s robust pipeline includes TP-04 for treating rosacea and TP-05, a tablet for preventing Lyme disease. Both candidates are currently in phase II development. TARS remains focused on engaging with the FDA for the regulatory path ahead for TP-04 and TP-05 shortly.
TARS has put up a strong performance, with shares rallying 168.7% so far in 2024. Positive regulatory updates and good pipeline progress should keep the stock afloat in 2025.
TARS currently carries a Zacks Rank 2. Loss per share estimates for 2025 have narrowed from $2.10 to $1.43 in the past 60 days.
Stoke Therapeutics
Clinical stage biotech, Stoke Therapeutics is developing its investigational candidate, zorevunersen (STK-001), for the treatment of Dravet syndrome, a severe and progressive genetic epilepsy.
Zorevunersen is a novel proprietary antisense oligonucleotide with the potential to become the first disease-modifying therapy to address the genetic cause of Dravet syndrome.
Zorevunersen is currently being evaluated in phase I/IIa and open-label extension (OLE) studies for the treatment of Dravet syndrome. Earlier this month, the FDA granted a Breakthrough Therapy designation to zorevunersen for treating Dravet syndrome.
STOK is currently discussing the path for a global phase III registrational study of zorevunersen in Dravet syndrome with the FDA and other regulatory agencies worldwide.
An update on the phase III registrational study on zorevunersen is expected shortly.
STOK put up a strong performance in 2024, with shares rallying 120.7% year to date. A positive regulatory update and successful development of zorevunersen should help the stock gain further in 2025.
STOK currently carries a Zacks Rank 2. Loss per share estimates for 2025 have narrowed from $2.59 to $2.49 in the past 60 days.
ChromaDex
ChromaDex currently markets Niagen as the most efficient and superior-quality NAD+ booster, which is available in several countries, including the United States. CDXC delivers Niagen as the sole active ingredient in its dietary supplement consumer product, Tru Niagen.
The company’s top line is currently being driven by a strong Niagen ingredient business as well as growth in the e-commerce business. Building on this momentum, management expects accelerated growth in 2025.
ChromaDex is developing its investigational candidate, nicotinamide riboside chloride (NRC) to treat ataxia telangiectasia (AT), a rare and progressive neurodegenerative disease that causes severe disability (premature aging).
The company has already had a discussion with the FDA to pursue an investigational new drug (IND) application for NRC. Subject to IND clearance by the FDA, CDXC will begin evaluating the candidate in human clinical studies.
The FDA has granted Orphan Drug designation and Rare Pediatric Disease designation to NRC for treating AT.
CDXC put up a staggering performance in 2024, with shares rallying 270.6% so far in 2024. The strong performance of the global e-commerce business, launch of new products and good pipeline progress should help the stock gain further.
CDXC currently carries a Zacks Rank 2. Estimates for 2025 earnings per share have increased from 9 cents to 12 cents over the past 60 days.
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