Four Top-Performing S&P 500 Biotech Stocks of 2017
By Mark Terry
It was a pretty good year for the stock market, but how about for biotech stocks?
Todd Campbell, writing for The Motley Fool, notes four biopharma stocks that topped out in the S&P 500 in 2017.
1. Align Tech
Based in San Jose, Calif., Align Tech is a global medical device company that offers products like Invasalign clear aligners—non-metal, transparent braces for orthodonture, iTero Intraoral scanners, and OrthoCAD digital services for dental professionals. Campbell notes that the company’s annualized revenue has more than doubled since 2012, and is projecting sales of $2 billion by 2020. This year, the company reported $1.1 billion in the first nine months, with net income hitting $221 million in that period.
Company shares are currently trading at $223.71.
2. Vertex Pharmaceuticals
Headquartered in Boston, Vertex focuses on developing therapies for cystic fibrosis (CF) and other rare diseases. On Dec. 12, the company announced a deal to co-develop and co-commercialize CTX001 with CRISPR Therapeutics. CTX001 is a gene therapy in development for beta-thalassemia and sickle cell disease.
Campbell writes, “Revenue was up 34 percent year over year in the third quarter, and as a result, management upped its full-year sales target to at least $2.1 billion from at least $1.9 billion previously. As its drugs get used more and revenue gets leveraged against fixed costs, earnings could expand significantly, and that’s undeniably got investors excited.”
Vertex shares are currently trading at $149.01.
3. Intuitive Surgical
Located in Sunnyvale, Calif., Intuitive is the developer and marketer of the da Vinci Surgical System, a robotic-assisted surgical device. The company is dominating the growing field of surgical robots. In the third quarter of 2017, revenue was up 37 percent compared to where it was two years ago, with third-quarter operating margins up 34.6 percent from 32.2 percent in 2015.
Intuitive Surgical shares are currently trading at $366.80.
Headquartered in San Diego, Illumina is the dominant force in DNA sequencing technology, managing to make it both cheaper and faster. Campbell writes, “Those advantages led to more machines being installed this year, and as a result, greater demand for Illumina’s high-margin consumables. In the first nine months of 2017, revenue increased to $1.97 billion from $1.78 billion in 2016. At the same time, net income improved to $658 million from $339 million. Since gene sequencing is critical to next-generation medicine, and Illumina is the market share leader, it’s not surprising this company’s shares have been on a roll.”
On Nov. 29, the company opened its first Solutions Center in France, at the Genopole Campus in Evry, close to Paris. This customer training center will provide demonstrations and instruction in the latest genomics techniques to up to 1,000 scientists annually.
“Illumina’s unmatched success and reputation as a global leader in genomics is the perfect fit for the Genopole campus, which brings together the key elements needed for our business to thrive, and we look forward to extending our relationships in France,” said Paula Dowdy, Illumina’s senior vice president and general manager for Europe, Middle East and Africa, in a statement. “The French government’s commitment to its own Genome Project demonstrates the value it places on genomics as part of the strategy to provide better future healthcare.”
Illumina shares are currently trading at $216.57.