Biotech stocks hit a two-year high in mid-July on a spate of promising clinical news, though acquisition activity has slowed significantly from the first part of the year.

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In 2020, the industry was thrust into the pandemic limelight as Pfizer (PFE) and its partner BioNTech (BNTX), along with Moderna (MRNA) and Johnson & Johnson (JNJ), launched a trio of Covid vaccines. But as society learned to live with Covid — and other concerns around the economy and politics took center stage — interest in biotech fell by the wayside.

Investors returned to the biotech universe in late 2023 and early 2024 as Big Pharma began putting its dry powder to work on takeovers. Acquisition momentum slowed and biotech stocks traded sideways for months. On July 16, the 730-company biotech industry group hit its highest point since July 2022. After tumbling through early August, shares are now on the rise yet again.

The industry group has a Relative Strength Rating of 78, according to IBD Digital. This means the industry group now ranks in the top 22% of all industry groups in terms of 12-month performance.

The biotech group ranks No. 50 out of 197 industry groups that IBD tracks. Meanwhile, the pharma group ranks No. 78.

But it’s key to watch specific measures when examining stocks. In terms of fundamental and technical metrics, the best biotech stocks trading above 10 right now are:

• Halozyme Therapeutics (HALO)
• United Therapeutics (UTHR)
• Ligand Pharmaceuticals (LGND)
• ADMA Biologics (ADMA)
• Catalyst Pharmaceuticals (CPRX)

This Biotech Stock Gets Under Your Skin

Halozyme Therapeutics is an expert in drug delivery.

The company is known for its Enhanze technology, which helps deliver drugs under the skin via a subcutaneous injection. The technology is behind some of the biggest medicines on the market, including Johnson & Johnson’s Darzalex Faspro and Roche‘s (RHHBY) Herceptin.

In the second quarter, Halozyme earned an adjusted 91 cents per share on $231.4 million in sales, up a respective 23% and 5% year over year. Both metrics beat expectations.

The biotech stock popped more than 4% on Aug. 7, the day Halozyme reported its second-quarter earnings.

The company kept its full-year guidance. In June, Halozyme guided to adjusted earnings of $3.65 to $4.05 a share and $935 million to $1.02 billion in sales in 2024. That was based on a new European patent covering the Enhanze technology. The patent is validated in 37 European countries and expires in March 2029.

Halozyme stock has a strong Composite Rating of 97, and a strong Relative Strength Rating of 96.

Shares broke out of a cup-with-handle base with a buy point at 42.64 on May 8, according to MarketSurge. Shares surged into the profit-taking zone on June 6. Savvy investors are encouraged to take some profits when a stock rises 20% to 25% above its buy point.

Halozyme stock is also well above its 50-day and 200-day moving averages, but it’s not forming a new base.

Halozyme is a Tech Leader.

Focusing On Treatments For PAH

United Therapeutics is another top-rated biotech stock. The company makes a handful of drugs for chronic diseases.

Its biggest drug is Tyvaso, a treatment for pulmonary arterial hypertension, or PAH. During the June quarter, Tyvaso sales climbed 25% to $398.2 million. But that missed expectations for $403.3 million. The nebulized formulation drove the miss, bringing in $139.9 million in sales vs. forecasts for $150.9 million.

Analysts are closely watching United Therapeutics’ pipeline. The company now expects to have the results of a final-phase PAH study in 2026 vs. prior expectations for 2025, Leerink Partners analyst Roanna Ruiz said in a recent report.

The biotech stock hit a record high intraday on July 25. But shares pulled back dramatically on July 31 following the second-quarter report. The biotech stock is now moving ahead again. United Therapeutics stock has a strong Composite Rating of 98, with a lower Relative Strength Rating of 95.

United Therapeutics stock lands on the Tech Leaders list as well.

Ligand Reports Strong Second Quarter

Ligand Pharmaceuticals remains on the list of leading biotech stocks.

The company invests in royalty deals and boasts more than 100 partnered commercial and development-stage programs.

Recently, Ligand collaborator Merck (MRK) received FDA approval for its pneumococcal vaccine for adults, Capvaxie. Ligand also agreed to acquire Apeiron Biologics for $100 million. The deal includes royalty rights to a cancer treatment called Qarziba. This is the sixth key asset added to Ligand’s commercial-stage portfolio since the beginning of 2023.

Ligand partner Verona Pharma (VRNA) also won FDA approval for its inhaled treatment for chronic obstructive pulmonary disease, or COPD. Ligand will receive a low single-digit royalty on worldwide net sales of the drug, Ohtuvayre.

In the second quarter, Ligand easily beat expectations with adjusted income of $1.40 per share and $41.5 million in sales. Earnings fell by two pennies year over year, but sales rocketed 57.5%.

The biotech stock has a Composite Rating of 95 and a matching Relative Strength Rating. Shares broke out of a cup-with-handle base with an entry at 88.73 on July 8, and are approaching a profit-taking zone. Savvy investors are encouraged to take some profits when a stock rises 20% to 25% above an entry.

Ligand also lands on the IBD Tech Leaders list.

ADMA Stock Continues Rising

Biotech stock ADMA Biologics is on a run.

The company is known for its human immune globulin products. These drugs are intravenous infusions for people with immunodeficiencies.

Shares rocketed 31% on Aug. 9 after the company reported adjusted earnings of 14 cents per share, walloping expectations for 8 cents. Earnings reversed from a year-earlier loss of 2 cents. Sales surged 78% year over year to $107.2 million, and handily topped calls for $86.4 million.

The biotech stock is now well above its 50-day and 200-day lines. It has best-possible Relative Strength and Composite ratings of 99. ADMA stock also is trading near a record high.

The stock is also on the IBD Tech Leaders list.

ADMA stock also currently tops the IBD 50.

Catalyst Rejoins Top Biotech Stocks

Catalyst just rejoined the list of top biotech stocks.

The company licenses already or soon-to-be approved treatments for rare diseases and diseases of the central nervous system. Today, the company has three products. Firdapse treats a neuromuscular condition that often affects small cell lung cancer patients. Fycompa is a seizure treatment. Catalyst also has a Duchenne muscular dystrophy drug called Agamree.

In the June quarter, Catalyst beat expectations with adjusted earnings of 56 cents per share on $122.7 million in sales. Earnings grew by three pennies year over year, while sales jumped more than 23%.

The biotech stock is now well above its 50-day and 200-day moving averages, and has a nearly perfect Composite Rating of 98. Shares also have a Relative Strength Rating of 93.

Catalyst stock is also a Tech Leader.

Follow Allison Gatlin on X, the platform formerly known as Twitter, at @IBD_AGatlin.

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