Since July, high-flying biotechnology stocks have been shunned by investors. One of the leading areas of speculative excitement and momentum-based strength in the last few years, biotech has suffered the most severe selloff since 2011 on a combination of profit taking, broader market turmoil and negative headlines.
From possibly illegal accounting practices at Valeant Pharmaceuticals (VRX) to negative political pressure on the issue of high drug prices, there have been a lot of negative headlines lately.
But the pressure is beginning to subside.
On Wednesday, the Biotech iShares (IBB) punched up and over its 50-day moving average — setting up a possible breakout from a four-month downtrend pattern — as my Edge subscribers added the position to their holdings. To be sure, this is a speculative idea. But given my expectation of a powerful end-of-year Santa Claus rally, biotechs will likely be in the vanguard.
Buying opportunities are popping up in a number of individual issues in the area, including these five biotech stocks worth a look.
Biotech Stocks: Gilead Sciences (GILD)
Gilead Sciences (GILD) is focused on the development of drugs used in the treatment of the human immunodeficiency virus (HIV) and liver disease. It is also working on medicines for the treatment of certain blood cancers, hypertension and cystic fibrosis, among other ailments. Much of the recent focus has been on its hepatitis C treatment.
On Tuesday, the company reported a top- and bottom-line beat for the third quarter while raising forward guidance.
Biotech Stocks: Achillion Pharmaceuticals (ACHN)
Achillion Pharmaceuticals (ACHN) is focused on the development of anti-infective drugs, including hepatitis C and drug-resistant bacteria. The Maxim Group is looking for shares to move towards $11 on research and development milestones, royalty payments and a cash influx from Johnson & Johnson (JNJ).
The company will report results on Nov. 5 after the bell. Analysts are looking for earnings of six cents per share on revenues of $32.6 million.
Biotech Stocks: MannKind Corp. (MNKD)
MannKind Corp. (MNKD) focuses on the development of diabetes treatments, particularly its Afrezza inhalation powder to control high blood sugar. But MNDK is now looking to diversify by using its Technosphere dry powder inhalation technology for other treatments as an alternative to needle-based delivery.
The company will report quarterly results on Nov. 9. Analysts are looking for a loss of seven cents per share on revenues of $180,000.
Biotech Stocks: Celgene (CELG)
Celgene (CELG) develops and commercializes treatments for cancer and inflammatory diseases. Examples include Revlimid, an oral drug for multiple myeloma; Abraxane, used to treat breast, lung and pancreatic cancers; and Otezla for arthritis.
The company will report results on Nov. 5 before the bell. Analysts are looking for earnings of $1.21 per share on revenues of $2.4 billion.
Biotech Stocks: Amgen (AMGN)
Amgen (AMGN) focuses on the development of treatments for illnesses in areas including oncology, hematology, inflammation and cardiovascular disease. The company’s main products include Neulasta, a protein to help cancer patients undergoing chemotherapy, and Enbrel, to treat rheumatoid arthritis.
The company will report Wednesday after the close, with analysts looking for earnings of $2.38 per share on $5.3 billion in revenues.