After hitting a two-year high in February, biotech stocks sloughed off in April and have started to make a comeback in May.
In 2020, the industry was thrust into the pandemic limelight as Pfizer and its partner BioNTech, along with Moderna and Johnson & Johnson, 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.
Interest appeared to return in early 2024 amid a slew of takeover deals. Though takeover momentum hasn't slowed, biotech stocks did in April. The industry group hit a two-year high at 3039.79 on Feb. 28. Shares reached a recent low at 2590.87 on April 25, down 15% over that time period. Since them, biotech stocks have risen about 6%, as of midday trading on May 2.
The industry group has a Relative Strength Rating of 86, which has toppled from a perfect 99 just three months ago, according to IBD Digital. This means the industry group now ranks in the top 14% of all industry groups in terms of 12-month performance.
Notably, some companies are fighting back against plans for Medicare to begin negotiating the prices of the costliest drugs.
The biotech group ranks No. 26 out of 197 industry groups that IBD tracks. Meanwhile, the pharma group ranks No. 102.
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:
- Neurocrine Biosciences
- CervoMed
- Halozyme Therapeutics
- Gyre Therapeutics
- United Therapeutics
The No. 1 Biotech Stock: Neurocrine
Neurocrine Biosciences is continuing its reign as the top-rated biotech stock.
The company is a leader in the neuroscience space. Neurocrine recently asked the Food and Drug Administration to approve crinecerfont, its treatment for congenital adrenal hyperplasia, or CAH. In this disorder, a child's normal growth and development are limited. The filing came a quarter ahead of expectations.
Neurocrine is also testing treatments for schizophrenia and cognitive impaired tied to schizophrenia. It expects to have the results of those midstage tests in the third quarter. Neurocrine also recently posted positive results for its treatment-resistant depression drug, a potential rival to Johnson & Johnson's Spravato.
All of these will be key to helping bolster Neurocrine's sales. The company is well known for Ingrezza, a treatment for tardive dyskinesia and chorea tied to Parkinson's disease. Both are movement disorders. In the first quarter, Ingrezza brought in $506 million in sales, surging 23% year over year and beating forecasts for $502.1 million, according to FactSet.
Neurocrine stock is forming a flat base with a buy point at 148.37, MarketSurge chart analysis shows. Shares are also trading above their 50-day and 200-day moving averages.
Shares have a perfect Composite Rating of 99, though a lower Relative Strength Rating of 87.
Neurocrine stock is an IBD Tech Leader. The biotech stock also ranks as No. 44 on the IBD 50 list of elite growth stocks.
Clinical-Stage Neuro-Focused Biotech
CervoMed is a clinical-stage biotech company working on treatments for neurodegenerative diseases. Previously, CervoMed was known as EIP Pharma.
The company's leading drug is in testing for patients with dementias, including Lewy body dementia and Alzheimer's disease. Laboratory testing also suggests CervoMed's leading drug, dubbed neflamapimod, could help patients recover after having a stroke.
It's important to note, CervoMed is steeped in losses and that trend isn't expected to change until 2029, according to FactSet. But revenue could ramp quickly. Biotech stock analysts project $66.9 million in 2028 sales growing to $484.6 million the following year.
CervoMed stock has a top Relative Strength Rating of 99 and a slightly lower Composite Rating of 92.
Shares are also well above their key moving averages after recently hitting a two-year high at 26.38 on March 20.
CervoMed stock just joined the IBD Tech Leaders list.
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 Herceptin.
In the fourth quarter, Halozyme earned an adjusted 82 cents per share on $230 million in sales, up a respective 71% and 27%. Earnings beat forecasts, while sales came in line with projections.
Halozyme stock has a strong Composite Rating of 97, but a lower Relative Strength Rating of 77.
Shares are forming a cup-with-handle base with a buy point at 42.64, but are struggling to retake their 50-day line.
Gyre Is Working In Hot Spaces
Gyre Therapeutics is a relatively new addition to the list of top biotech stocks. The company is working on a drug to treat liver fibrosis due to hepatitis B and metabolic dysfunction-associated steatohepatitis, or MASH.
Gyre is also considering treatments for chronic obstructive pulmonary disease, or COPD, pulmonary arterial hypertension, or PAH, and acute/acute-on chronic liver failure.
The MASH space has heated up with the FDA approval of the first-ever treatment, a drug called Rezdiffra from Madrigal Pharmaceuticals. Merck just won approval for the first drug that treats an underlying cause of PAH, Winrevair.
Like other early-stage biotech companies, Gyre has reportedly years of annual losses, though came in with $113.5 million in sales last year. Analysts don't currently have any sales projections for future years, however.
Today, Gyre stock has a strong RS Rating of 98 and a Composite Rating of 87. But the biotech stock undercut its 50-day line on April 10.
Gyre is also a new addition to the IBD Tech Leaders list.
Focusing On Treatments For PAH
United Therapeutics is now a top-rated biotech stock. The company makes a handful of treatments for chronic diseases.
Its biggest drug is Tyvaso, a treatment for pulmonary arterial hypertension, or PAH. During the March quarter, Tyvaso sales surged 56% to $372.5 million, beating forecasts for $368.3 million. The firm's second biggest moneymaker, another PAH drug called Remodulin, generated $128 million in sales, also above consensus calls for $119.6 million.
Analysts are also 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 its highest point since last August after United Therapeutics reported its first-quarter earnings on May 1. Shares are above their key moving averages and have a nearly perfect Composite Rating of 98, with a lower Relative Strength Rating of 80.
Follow Allison Gatlin on X, the platform formerly known as Twitter, at @IBD_AGatlin.
