Given its substantial growth in recent years and its potential for continued expansion driven by steady demand, the pharma industry exhibits resilience in times of economic instability.
Moreover, governments worldwide have recognized the critical role of maintaining the industry’s economic well-being and have introduced various reforms to strengthen its essential functions.
Therefore, investors could consider adding quality pharma stocks, Catalyst Pharmaceuticals, Inc. (CPRX), MorphoSys AG (MOR), and Voyager Therapeutics, Inc. (VYGR), to their watchlist. These stocks also exhibit lower valuation multiples than their industry peers.
Moreover, cloud computing and blockchain technology are revolutionizing the pharmaceutical industry. Cloud computing helps companies innovate and bring new treatments to market faster while securely storing sensitive data, ensuring regulatory compliance, and maintaining data integrity.
In addition, blockchain technology provides a secure, decentralized ledger for transparent data sharing, impacting drug production, supply chain tracking, fraud prevention, and research.
Furthermore, e-commerce in healthcare has been gaining traction amid increasing awareness, availability of vital drugs online, and attractive discounts provided by e-pharmacies.
The global e-pharmacy market is anticipated to expand at a CAGR of 19.5% until 2030.
Let us take a detailed look at the stocks mentioned above:
Catalyst Pharmaceuticals, Inc. (CPRX)
CPRX, a commercial-stage biopharmaceutical company, focuses on developing and commercializing therapies for people with rare debilitating, chronic neuromuscular, and neurological diseases.
CPRX’s forward P/E and EV/EBIT multiples of 15.85 and 10.78 are 40.9% and 35.6% lower than the industry averages of 26.80 and 16.74.
On July 19, 2023, CPRX announced the completion of its acquisition from Santhera Pharmaceuticals Holdings of an exclusive license for North America for vamorolone, a potential treatment for patients suffering from Duchenne Muscular Dystrophy.
The license is for exclusive commercial rights in the U.S., Canada, and Mexico, as well as the right of first negotiation in Europe and Japan should Santhera pursue partnership opportunities. Additionally, CPRX will hold North American rights for any future approved indications of vamorolone.
In the fiscal second quarter that ended June 30, 2023, CPRX’s total revenue increased 87.5% year-over-year to $99.58 million. Its non-GAAP net income increased 99.2% year-over-year to $60.38 million, while its non-GAAP net income per share increased 91.5% year-over-year to $0.53.
CPRX’s revenue is expected to rise 75.3% year-over-year to $100.37 million for the fiscal third quarter ending September 2023. The company has surpassed the revenue estimates in three of the trailing four quarters, which is impressive.
Shares of CPRX have gained 17.1% over the past three months to close the last trading session at $14.14.
CPRX’s strong fundamentals are reflected in its POWR Ratings. The POWR Ratings are calculated by considering 118 different factors, with each factor weighted to an optimal degree.
The stock has a B grade for Quality and Value. Within the 161-stock Medical - Pharmaceuticals industry, it is ranked #60.
Beyond what is stated above, we’ve also rated CPRX for Growth, Stability, Sentiment, and Momentum. Get all CPRX ratings here.
MorphoSys AG (MOR)
Headquartered in Planegg, Germany, MOR is a commercial-stage biopharmaceutical company that engages in the discovery, development, and commercialization of therapeutic antibodies for patients suffering from cancer and autoimmune diseases in the United States.
MOR’s forward EV/Sales of 2.60x is 25.1% lower than the industry average of 3.47x. Its trailing-12-month P/S of 3.43 is 9.9% lower than the 3.81 industry average.
In June, MOR presented clinical results of pelabresib, tafasitamab, and tulmimetostat in oral presentations, posters, and publications at the world’s largest oncology conference, the American Society of Clinical Oncology (ASCO) Annual Meeting, the European Hematology Association (EHA) Annual Meeting and the International Conference on Malignant Lymphoma (ICML). This should help the company create brand awareness and market the products.
MOR’s total revenues for the second quarter that ended June 30, 2023, were €53.2 million ($57.70 million). Its gross profit rose 8.7% year-over-year to €45.50 million ($49.35 million). Moreover, its total operating expenses declined 1% year-over-year to €96 million ($104.12 million).
Analysts expect MOR’s revenue to amount to $258.61 million in the fiscal year 2023. The company has a remarkable earning surprise history, surpassing the revenue estimates in three of the trailing four quarters.
The stock has soared 125.4% year-to-date to close the last trading session at $8.07.
The stock has an A grade for Sentiment and B for Value. It is ranked #59 in the same industry.
Click here to access MOR’s additional POWR Ratings (Growth, Momentum, Stability, and Quality).
Voyager Therapeutics, Inc. (VYGR)
VYGR, a gene therapy company, focuses on developing treatments and next-generation platform technologies. The company’s lead clinical candidate is the VY-AADC, which is in an open-label Phase 1 clinical trial for treating Parkinson’s disease.
VYGR’s forward EV/EBIT and EV/EBITDA multiples of 3.27 and 3.84 are 74.7% and 77.1% lower than the industry averages of 12.93 and 16.74.
During the first half of the year that ended June 30, 2023, VYGR’s collaboration revenue increased significantly year-over-year to $155.33 million. The company reported an operating income of $97.46 million, compared to a loss of $40.72 million in the previous-year period.
Moreover, the company’s net income and net income per share amounted to $101.84 million and $2.42, compared to a loss of $40.41 million and $1.06 in the year-ago period.
VYGR’s revenue is expected to increase 297.4% year-over-year to $162.56 million in the fiscal year 2023. The company has surpassed the revenue estimates in three of the trailing four quarters.
VYGR’s shares have gained 69.4% over the past nine months to close its last trading session at $9.59.
It’s no surprise that VYGR has an A grade for Value and a B for Quality. The stock is ranked #16 within the same industry.
To access VYGR’s additional grades for Growth, Momentum, Sentiment, and Stability, click here.
What To Do Next?
Discover 10 widely held stocks that our proprietary model shows have tremendous downside potential. Please make sure none of these “death trap” stocks are lurking in your portfolio:
CPRX shares were trading at $13.79 per share on Thursday morning, down $0.35 (-2.48%). Year-to-date, CPRX has declined -25.86%, versus a 16.60% rise in the benchmark S&P 500 index during the same period.
About the Author: Kritika Sarmah
Her interest in risky instruments and passion for writing made Kritika an analyst and financial journalist. She earned her bachelor's degree in commerce and is currently pursuing the CFA program. With her fundamental approach, she aims to help investors identify untapped investment opportunities.
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