Strong quarterly results from big capitalization companies sent the biotechnology sector higher in February. This will attract more buyers who missed the run-up, especially for companies that have a moat.
Regeneron (NASDAQ:REGN) headed back into the $400 range last week when investors bought up companies working on a vaccine for COVID-19, or coronavirus. Regeneron has a triple action drug in clinical trials.
The strong fourth-quarter earnings beat suggests that the stock is worth more, even after the weeks-long rally. Its revenue grew by 12.5% to $2.17 billion. Sanofi (NYSE:SNY) collaboration revenue fell 0.1% to $427.1 million, offset by a 13.3% increase in Eylea sales.
Dupixent, a drug that treats millions suffering from atopic dermatitis, lifted overall results. Sales topped $751.5 million, up an incredible 135.7% Y/Y. Praluent and Kevzara are still a small part of total revenue.
Though earnings year-over-year are unchanged, Dupixent and Eylea are driving profitability for this year. And as Dupixent wins FDA approval for a wider indication, including atopic dermatitis in children, the stock will trend higher.
Teva Pharmaceuticals (NYSE:TEVA) posted a 104% surge in net income to $110 million. Revenue rose by 1% to $4.47 billion. Given the free cash flow guidance of $1.8 billion - $2.2 billion in 2020, Teva’s ability to pay down debt lowers its risk profile. Teva is a buy.
