The markets have been performing very well in 2019 with the Dow Jones, the Nasdaq, and the S&P 500 all up more than 20% since the beginning of the year. That's great news for investors who are already holding stocks, but for those looking to get into the market for the first time, it means current valuations are high. Finding good deals is hard, as many stocks are trading at inflated values, especially in biotech, where stocks tend to take off at a moment's notice.

However, these two biotech stocks look very cheap today, and it's not too late for investors to scoop up these deals.

1. Exelixis

Exelixis (NASDAQ:EXEL) is a biotech company that focuses on oncology and develops medicine to help patients battle various cancers. It's an area of healthcare that, unfortunately, isn't likely to see demand decrease anytime soon. The company's most popular drug is Cabometyx, which treats patients who have liver cancer or advanced kidney cancer. The drug aims to stop the growth and division of cancer cells, which can prevent tumors from growing, potentially shrinking them.

People working in a lab

Image source: Getty Images.

In Exelixis' Q3 results released in October, Cabometyx product sales of $187 million made up 98% of net product revenue and 69% of the company's overall sales for the period. Over the past nine months, the drug's sales totaled $552 million, up 29% from the same period in the prior year. However, the company isn't entirely dependent on product sales, making it a safer investment.

Exelixis also collects a significant amount of revenue from licenses, which includes royalty revenue. During the quarter, revenue from licenses contributed $68 million to the company's top line, accounting for about 25% of its total revenue. The company has come a long way over the years with revenue of just $37 million in 2015, skyrocketing to $853 million in 2018. With Cabometyx continuing to earn approvals in North America, there's still a lot of growth to be had for the company's flagship drug.

Exelixis has also performed very well further down its income statement. Unlike many biotech stocks still incurring significant losses in their early stages, Exelixis has consistently been profitable, with $252 million in net income generated year to date. 

Currently, the stock looks like a steal trading at just nine times its earnings. However, it's important to note that the company got a boost in its earnings in Q4 of last year thanks to an income tax benefit that added $238 million to the company's bottom line,  close to 40% of the $612 million Exelixis generated over the trailing 12 months.

But even at a higher P/E, the stock still looks cheap, as its PEG ratio, which factors in future growth, is just 0.4. A PEG of less than one indicates good value for the level of growth the company expects, and Exelixis is well below that benchmark.

2. Innoviva

Innoviva (NASDAQ:INVA) is a great stock to invest in for its simplicity. The company is involved in the development of drugs, but its revenue comes from collecting royalties. Innoviva partnered with GlaxoSmithKline (NYSE:GSK) so it receives royalty payments on the sale of the drugs the two companies brought to market together. Partnering with a big name like GlaxoSmithKline, which has a market cap of $118 billion (Innoviva's market cap is just $1.4 billion), helps add stability for investors who may otherwise fear that Innoviva is a risky buy on its own.

However, with minimal costs, Innoviva has been able to generate strong profits, with its operating income reaching $100 million in each of the past three years. It has also seen terrific sales growth. In 2018, sales of $261 million were up 20% from the prior year and nearly five times the $54 million Innoviva recorded in 2015. 

Its PEG ratio is also very low, at 0.4, and its current P/E ratio is just four. However, with an income tax benefit of nearly $200 million in last year's Q4, its P/E is also looking slightly lower than it would be otherwise. 

Which is the better option for investors today?

Neither Exelixis nor Innoviva has garnered much excitement from investors with their stocks down 8% and 18% year to date, respectively. However, with both biotech stocks growing at impressive rates and trading at low multiples of earnings, either stock could be a great buy today. However, Innoviva is slightly less risky only because of its relationship with GlaxoSmithKline and the fact that the company doesn't need to worry about managing a complex cost structure.