Last week was a pretty good one for stocks across the board. Despite dropping on Wednesday and Friday the Nasdaq Composite, and S&P 500 indexes notched minor gains for the week. While it was a pretty good week for most stocks, a couple of healthcare names jumped through the roof.
Shares of Sana Biotechnology (SANA -0.93%) popped 58% higher and shares of Brookdale Senior Living (BKD 1.63%) gained 42% last week.
Of course, last week's gains aren't going to help your portfolio's performance if they don't continue. Here's what you should know about these two stocks before betting on their continued success.
Sana Biotechnology
This is a very early stage biotechnology company developing new cell-based therapies. Sana Biotechnology understands that engineered cells can be incredibly powerful therapies but immune responses to cellular therapies severely curtails their utility. With this in mind, the company is focusing on cell lines that go unnoticed by our immune systems.
The stock jumped last week in response to some interesting pre-clinical data that suggests it's on the right track. Insulin-secreting pancreatic islet cells derived from a human donor and engineered to avoid an immune system attack were shown to survive, engraft, and treat diabetes. The company also showed results from a cancer therapy candidate that attacked tumors while evading an immune system response.
If Sana Biotechnology has truly found a way to engineer cellular therapies that completely evade immune responses a small investment now could reap enormous gains down the road. Before you get too excited, though, you should know the results Sana Biotechnology shared were produced in studies with mice.
The results that pushed Sana higher last week are a step in the right direction but outstanding mouse data is just one of many hurdles new therapy candidates need to cross to justify running clinical trials. If half the drugs that seemed amazing for mice also worked for humans, diabetes and cancer would already be distant memories.
The company told investors to expect some clinical data for two of its candidates by the end of 2023. It could be much longer before we know if Sana Biotechnology's treatments work as well for people as they do for mice. The company's most advanced candidate was cleared to begin clinical trials in the U.S. this January, but Sana hasn't registered a clinical trial with the National Institutes of Health yet
Sana Biotechnology's current market cap of $993 million has some future success already baked in. If there's any sign of an immune response to its treatment candidates when clinical trials finally begin, the stock could tank. It's probably best to watch this stock from a safe distance until after we see initial results from studies with real patients.
Brookdale Senior Living
It isn't just your imagination. The number of older adults in America is skyrocketing. The U.S. Census Bureau expects the 85 and older population to more than double between 2020 and 2040. Many will spend time in a community operated by Brookdale Senior Living.
Brookdale Senior Living operates 673 communities spread throughout 41 states. The COVID-19 pandemic was no small challenge and occupancy rates are still down compared to pre-pandemic levels.
The stock rocketed higher last week in response to preliminary first-quarter results that showed a big occupancy boost. An average occupancy rate of 76.1% in March was 2.5% higher than the company reported a year earlier.
Brookdale Senior Living also reported revenue per available unit (RevPAR) that grew 12.9% year over year. Occupancy is still down compared to pre-pandemic levels but first-quarter RevPAR is exceeding pre-pandemic levels.
BKD Net Income (Annual) data by YCharts
Before buying this stock in expectation of further gains, investors should know that this company has posted deep losses every year since 2014 with the exception of 2020. Brookdale's occupancy rates are recovering nicely from the COVID-19 pandemic but there are plenty of better stocks to buy right now.
