Biotechs may still be generally out of favor, but the group has been firming up in recent weeks, holding its own in IBD's 197 industry group rankings. Even though large-cap names like Biogen (NASDAQ:BIIB), Celgene (NASDAQ:CELG) and United Therapeutics (NASDAQ:UTHR) have come under selling pressure, there are still plenty of top-rated names in the group showing relative strength.
Amgen (NASDAQ:AMGN) is carving a first-stage cup-with-handle base with a 165.10 buy point. Drug benefit manager CVS Health recently added Amgen's cholesterol-lowering drug Repatha to its list of covered drugs for private plans. Repatha competes with another PCSK9 inhibitor from Sanofi (NYSE:SNY) and Regeneron (NASDAQ:REGN) called Praluent. Both drugs were approved this year by the FDA and can cut "bad" cholesterol by up to 60%.
Ligand Pharmaceuticals (NASDAQ:LGND) is another top-rated name in the group with a decent chart. It recently cleared a 104.04 buy point, but another argument could be made that the stock is still working on the right side a base. It could add a handle area from here or try to break out over its prior high of 112.40.
In early November, Ligand reported revenue of $17.7 million, up 18% from the year-ago quarter. Royalty revenue rose 30% to $9.8 million, primarily due to higher royalties from Promacta and Kyprolis. Promacta is an oral medicine that increases the number of platelets in the blood. Kyprolis is a multiple myeloma treatment.
At an analyst presentation earlier this month, the company projected that in 2020, more than 24 products from its portfolio will be commercialized and generating revenue for the company. That's up from a prior forecast of 20. Ligand has alliances, licenses and other business relationships with the several big pharmaceutical firms, including Novartis (NYSE:NVS), Amgen, Merck (NYSE:MRK), Pfizer (NYSE:PFE), Baxter International (NYSE:BAX) and Eli Lilly (NYSE:LLY).
Elsewhere, small-cap Emergent Biosolutions (NYSE:EBS) is also good watch-list fodder. It's made solid progress after a recent breakout over a 36.30 buy point. It's on the thin side, with an average daily dollar volume of just over $13 million, but growth prospects look good, with full-year profit seen rising 28% this year and 24% in 2016.
The ever-present threat of terrorism drives business at Emergent. The company develops vaccines and therapeutics for biological and chemical threats, as well as emerging infectious diseases.
China Biologics (NASDAQ:CBPO) is also in a good technical setup, but being from China, it's the most speculative of the bunch. Even so, shares are priced around 120 a share, and fund ownership of the stock has accelerated for six straight quarters, from 38 funds to 180 funds.
In 2014, annual pretax margin hit an all-time high of 52.4%. Return on equity was also strong at 33.6%. China Biologics develops plasma-based biopharmaceutical products for hospitals and inoculation centers in China.
BY KEN SHREVE,
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