After taking a battering in 2023, the biotech industry is hoping for a better year ahead, with some leading names doubling down on AI. Here is a collection of biotech stocks to watch based on some recent news from the industry.
- Recursion Pharmaceuticals jumped 34.2% when Nvidia revealed $76m stake.
- Veracyte completed $95m acquisition of C2i Genomics, bolstering its cancer testing with AI.
- Senti Biosciences announced it was cutting 37% of its workforce to free up cash for its cell therapy cancer trials.
Recursion Pharmaceuticals
The Nvidia Investment Stock
Recursion Pharmaceuticals’ [RXRX] share price has jumped 34.2% since 14 February, when Nvidia [NVDA] revealed that it had built up a stake in the biotech firm worth $76m. The two parties announced a collaboration last July, designed to accelerate Recursion’s artificial intelligence (AI) drug discovery using Nvidia’s cloud-based tools for AI applications. “With our powerful dataset and Nvidia’s accelerated computing capabilities, we intend to create groundbreaking foundation models in biology and chemistry at a scale unlike anything that has ever been released in the biological space,” said Recursion Co-founder and CEO Chris Gibson in a statement at the time.
Intellia
The Gene Therapy Stock
Intellia Therapeutics [NTLA] announced a partnership with clinical-stage genetic medicines company ReCode Therapeutics on 15 February. The two parties will develop novel genomic medicines for the treatment of cystic fibrosis, harnessing Intellia’s CRISPR-based gene-editing platform. “Intellia’s vision to realise the full promise of gene editing includes extending the reach of our industry-leading CRISPR-based platform to targets outside the liver,” Intellia President and CEO John Leonard said in a press release.
Veracyte
The AI Cancer Detection Stock
Veracyte [VCYT] completed the acquisition of C2i Genomics earlier in February, in a deal worth up to $95m. The start-up’s AI detection technology will be integrated into Veracyte’s novel diagnostics platform to improve cancer care. As Veracyte CEO Marc Stapley explained in a press release, the platform “will enable us to expand the value we deliver to clinicians and their patients, beginning with early cancer diagnosis and risk assessment, and now moving further along the patient journey into treatment monitoring”.
Regeneron Pharmaceuticals
The Japan Approval Stock
Regeneron [REGN] and Sanofi’s [SNY] blockbuster drug, Dupixent, was last week given the nod from Japan’s Ministry of Health, Labour and Welfare to treat chronic hives in patients aged 12 and over. The news comes four months after a rejection by the US Food and Drug Administration due to “additional efficacy data” being required. Other conditions Dupixent is already approved to treat in the US include atopic dermatitis and asthma. Dupixent brought in $3.1bn in global sales in Q3 2023, up 33% year-over-year, Regeneron reported last November.
Senti Biosciences
The Strategic Layoffs Stock
Senti Biosciences [SNTI] announced in early January that it was cutting its workforce by 37% to free up cash for its cell therapy cancer trials. Co-founder and CEO Timothy Lu said in a statement that, while the company had made “significant progress toward our mission to advance our gene circuit enhanced oncology cell therapies … we are taking the difficult but necessary steps to enhance our focus”. Senti had 122 employees as of 31 December 2022, according to Macrotrends.
Another Way to Invest in Biotechnology
The ARK Genomic Revolution ETF [ARKG] holds all five stocks as of 16 February. As of 31 December, healthcare accounts for 89.7% of the portfolio, while information technology and materials have weightings of 5.8% and 4.4% respectively. The fund is down 3.3% in the past year through 19 February and up 3.5% in the past six months.
The iShares Biotechnology ETF [IBB] holds Intellia, Regeneron, Recursion and Veracyte. As of 16 February, biotechnology accounts for 78.6% of the portfolio, while life sciences tools & services has been allocated 17.9%. Pharmaceuticals, healthcare equipment and healthcare services all have weightings of less than 3%. The fund is up 2.1% in the past year and up 8.5% in the past six months.
Disclaimer Past performance is not a reliable indicator of future results.
CMC Markets is an execution-only service provider. The material (whether or not it states any opinions) is for general information purposes only, and does not take into account your personal circumstances or objectives. Nothing in this material is (or should be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by CMC Markets or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person.
The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although we are not specifically prevented from dealing before providing this material, we do not seek to take advantage of the material prior to its dissemination.
CMC Markets does not endorse or offer opinion on the trading strategies used by the author. Their trading strategies do not guarantee any return and CMC Markets shall not be held responsible for any loss that you may incur, either directly or indirectly, arising from any investment based on any information contained herein.
*Tax treatment depends on individual circumstances and can change or may differ in a jurisdiction other than the UK.
Continue reading for FREE
- Includes free newsletter updates, unsubscribe anytime. Privacy policy
