Mirum Pharmaceuticals is building a cup base with a buy point of 54.23, and the biotech stock has cleared an early entry at 49 in the base. Since this is an early stage base that can net higher gains, Mirum Pharmaceuticals is Tuesday's selection for IBD 50 Stocks To Watch.
The relative strength line is beginning to rise and shows that the stock is performing better than the benchmark S&P 500. Year to date, Mirum stock had gained 22% as of Monday vs. the S&P 500 which has just started venturing into positive territory. From its initial public offering at 15 on July 18, 2019, the stock also has rocketed 236%.
Shares soared on May 8 after first-quarter results. Sales accelerated from the prior quarter and grew 61% to $111.6 million.
Meanwhile, the biotech company announced a loss of 30 cents per share compared with a 54-cent loss for the prior year's quarter. For the full year, the company anticipates midpoint sales of $443 million.
Biotech Stock Wins FDA Approval
During the quarter, Mirum won approval from the Food and Drug Administration for its oral tablet formulation of Livmarli, a treatment for itching caused when bile builds up in the liver in patients who are at least 3 months old.
According to the product website, unmanageable itch was the reason for 49% to 82% of liver transplants. The drug blocks a bile transporter in the body and prevents bile from going back into the liver where it can build up.
The biotech stock has a Composite Rating of 84 though its EPS Rating lags at 45 due to its losses. The stock also has been outperforming the majority of other stocks in the Investor's Business Daily database. It has a Relative Strength Rating of 89.
Fund Ownership Sits At 79%
Mutual funds have not been wary of loading up on the stock. According to IBD MarketSurge data, funds own 79% of outstanding shares. Further, more funds have been buying shares of Mirum stock over the past three quarters.
A tool that tracks price volume metrics also indicates institutional buying. It sits at B+ on a scale of A to E. More signs of demand over the past 50 trading days can be seen in the Up/Down Volume Ratio. That stands at a highly rated 1.6.
The biotech group holds 63rd place among IBD's 197 industry groups, according to IBD Stock Checkup.
Also, in the IBD mutual fund index, the Lord Abbett Developing Growth Fund (LAGWX) and the Columbia Small Cap Growth Fund (CMSCX) hold shares of Mirum stock.
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