Pharmaceutical stocks are taking it on the chin right now. Underscoring this point, the SPDR S&P Biotech ETF, a top barometer of pharmaceutical investor sentiment, is down by a painful 22.1% year to date.
The market's "man with a hammer" attitude toward pharmaceutical stocks has arguably created some truly compelling buying opportunities for patient investors, however. Here is a brief overview of eight pharmaceutical stocks (listed alphabetically) that have fallen way too far this year, making them top buys leading into 2022.
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1. Adaptimmune Therapeutics
Adaptimmune Therapeutics (ADAP 3.41%), a cellular immunotherapy company, has so far lost 47.4% of its value relative to its 52-week high in 2021. The biotech's shares have cratered this year despite its lead product candidate, afami-cel, making significant strides toward a regulatory filing with the Food and Drug Administration (FDA) next year.
Adaptimmunes's shares are thus trading at less than 2 1/2 times the company's last stated cash position, and close to their 52-week low right now. With multiple partnerships in place and a regulatory filing on the near-term horizon, the stock should roar back to life in 2022.
2. Affimed Therapeutics
Affimed Therapeutics (AFMD -2.91%), a German cancer immunotherapy company, has seen its shares wilt by 46.5% from their 52-week high set back in the second quarter of 2021. This sharp decline occurred even though the company posted outstanding early-stage trial results for its innate cell engager AFM13 in patients with recurrent or refractory CD30-positive lymphomas earlier this year.
Under normal market conditions, this clear-cut win in the clinic probably would have resulted in a sustained rally. Instead, Affimed's shares are being valued at just 1.2 times AFM13's peak sales projection for its first potential indication. This dirt-cheap valuation is the reason Wall Street thinks the biotech's shares could more than double in value over the next 12 months.
3. Amicus Therapeutics
Shares of the rare-disease drugmaker Amicus Therapeutics (FOLD 1.98%) are down by over 55% from their 52-week high right now. The orphan-drug specialist took a big hit back in February after announcing late-state trial results for its Pompe disease candidate AT-GAA. Since then, Amicus has decided to sally forth with regulatory filings for the therapy in both the E.U. and the United States.
What's noteworthy about this stock is that it is presently trading at roughly 5.4 times 2024 projected sales under a worst-case scenario. That might sound like a rich valuation, but it is among the lowest within the highly coveted orphan-drug space. Amicus' stock, in turn, should be among the first to rebound once the negative sentiment surrounding biopharma dissipates.
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4. Aurinia Pharmaceuticals
Aurinia Pharmaceuticals (AUPH 1.20%) stock is off of its 52-week high by a whopping 42.1% at the moment. The autoimmune-disease specialist has reverted to the mean in recent weeks after filing a $250 million mixed-shelf offering with the Securities and Exchange Commission, which some investors took as a sign that a buyout was off the table. Because of this sharp pullback, Aurinia's stock is now trading at only about 2.4 times the 2025 sales projection for its lupus nephritis medication Lupkynis. Buyout or not, Aurinia's shares are arguably a steal at these levels.
5. Axsome Therapeutics
Axsome Therapeutics (AXSM 4.71%) stock is now trading at a 60% discount compared to its 52-week high. Investors hit the exits on this biotech stock after the FDA notified the company that it couldn't complete a regulatory review for the experimental drug for major depressive disorder AXS-05 due to deficiencies in its regulatory application. Several months later, the FDA has yet to hand down a final decision on AXS-05.
On the bright side, management thinks these deficiencies can be addressed during the current review cycle. If true, Axsome's shares ought to mount a furious comeback in 2022. Wall Street, after all, has pegged AXS-05's peak sales for major depressive disorder at a whopping $1.3 billion.
6. Beam Therapeutics
The stock of Beam Therapeutics (BEAM 0.84%), a clinical-stage genetic base-editing company, has shed 48% of its value relative to its 52-week high in recent weeks. The good news is that Beam hasn't reported any major clinical or regulatory setbacks. Rather, investors seem to be backing away from this biotech mostly because of its sky-high valuation. Beam currently sports a market cap of $4.7 billion. That's definitely a rich valuation for a biotech with an unproven platform, especially for one that is just now entering human trials.
That being said, Beam's stock could turn out to be a bargain if its novel genetic base-editing platform strikes gold in the clinic. Data from its first clinical candidate, BEAM-101, should be available sometime in 2022. The company plans on trialing the therapy as a treatment for the rare blood disorder sickle cell disease.
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7. BioCryst Pharmaceuticals
Shares of BioCryst Pharmaceuticals (BCRX -0.45%), a mid-cap rare-disease drugmaker, have slipped by 36% from their 52-week high of late. BioCryst's stock, however, should arguably be moving in the opposite direction based on the blistering sales growth for its hereditary angioedema drug Orladeyo.
The biotech's shares are trading at roughly three times Orladeyo's peak sales estimate, and well under three times the net present value for the whole of its pipeline and product portfolio. That's an incredibly cheap valuation for a high-growth pharmaceutical stock.
8. BridgeBio Pharma
BridgeBio Pharma (BBIO 1.33%) stock is down by a hefty 45.6% relative to its 52-week high at the time of this writing. The company's shares have steadily marched lower in the second half of 2021 due to competitive concerns about its experimental amyloidosis drug, Acoramidis, which is slated to yield data before year's end. While industry insiders are largely expecting this late-stage data to be positive, some analysts aren't convinced that the drug can compete effectively against rival therapies. That's a potentially major problem. Acoramidis is easily BridgeBio's most important value driver, with its net present value estimated at a whopping $3.5 billion, according to a recent report by Evaluate Vantage.
BridgeBio's stock could soar if Acoramidis' trial surpasses expectations. Wall Street's current consensus price target, in fact, implies that the biotech's shares could more than double in value over the next 12 months.
