Based on key financial metrics such as the price-to-sales ratio, shareholder yield and the price-earnings ratio, the following 7 stocks made the list for top value stocks in the Biotechnology & Medical Research industry. Those looking for value stocks to add to their portfolio may want to use this list as a starting point for further investment research.

Latest Biotechnology & Medical Research Stock News

Before choosing which top Biotechnology & Medical Research stock to buy, be sure to conduct proper due diligence: analyze various financial metrics and look at historical data, public statements and news coverage.

The Biotechnology and Medical Research sub-industry has a positive outlook, a historically defensive sub-industry. Drug sales are anticipated to have high growth, primarily driven by COVID-19 therapeutics, the continued adoption of many new and innovative therapies, a favorable M&A environment, and a low prevalence of patent expirations in 2022. Additionally, companies could see prescription growth pick up as in-person physician visits return to pre-pandemic levels. As COVID-19 variants have emerged, vaccine boosters have been offered in order to increase efficacy. Due to this, repeat vaccinations will likely be necessary for lifelong immunity which would provide a long-lasting and significant source of revenue for lead vaccine developers. Aside from vaccines, the biotech industry is dependent on the volume of new therapy approvals. The FDA’s heavy focus on COVID-19 could slow the approvals on non-COVID-19 therapies. Despite this, the biotech industry will likely see promising sales growth over the next five years as it usually takes at least five years for new drugs to reach peak sales levels. Approval activity has also been on the rise recently. Mergers and acquisitions activity is expected to remain low as a more activist Federal Trade Commission (led by Lina Khan) could be more skeptical of proposed mergers. Year to date through June 30, the S&P 1500 Biotech Index was down 1.6%, vs. a 20.5% decline for the S&P 1500 Composite Index. In 2021, the Biotech Index rose 8.2%, vs. a 26.7% gain for the Composite Index.

Why Focus on Undervalued Biotechnology & Medical Research Stocks?

Value investors seek to buy stocks at a discount to their intrinsic value. Long-term returns show that such strategies are advantageous. Value stocks, as a group, tend to outperform growth stocks over extended periods of time. Typically, value investors perform financial analysis of numerous metrics, don’t follow the herd and are long-term investors.

AAII’s A+ Investor Value Grade is derived from a stock’s Value Score. The Value Score is the percentile rank of the average of the percentile ranks of the price-to-sales ratio, price-earnings ratio, enterprise-value-to-EBITDA (EV/EBITDA) ratio, shareholder yield, price-to-book-value ratio and price-to-free-cash-flow ratio. The score is variable, meaning it can consider all six ratios or, should any of the six ratios not be valid, the remaining ratios that are valid. To be assigned a Value Score, stocks must have a valid (non-null) ratio and corresponding ranking for at least two of the six valuation ratios.

What Goes Into AAII’s Value Grade?

Stock evaluation requires access to huge amounts of data as well as the knowledge and time to sift through it all, make sense of financial ratios, read income statements and analyze recent stock movement. AAII created A+ Investor, a robust data suite that condenses data research in an actionable and customizable way suitable for investors of all knowledge levels, to help investors with that task.

AAII’s proprietary stock grades come with A+ Investor. These offer intuitive A–F grades for more than just value. It is possible for a stock to appear cheap based on one valuation metric but appear expensive on another. It is also possible for one valuation ratio to be associated with outperforming stocks during certain periods of time but not others. Some stocks may even have null values for certain metrics like the price-earnings ratio or the price-to-book ratio but not others. An example of this would be a company with losses instead of profits or a negative book value because of heavy borrowing. Negative earnings or book value result in non-meaningful ratios that are left blank or null.

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7 Undervalued Biotechnology & Medical Research Stocks

Of course, there are countless value stocks that are worth mentioning, but this is a concise list of the top 7 undervalued stocks in the Biotechnology & Medical Research industry for Monday, December 04, 2023. Let’s take a closer look at their individual scores to see how they measure up against each other and the Biotechnology & Medical Research industry median.

The Value Grade is assigned based on how each stock’s composite valuation compares to all other stocks.

The process for assigning grades starts with each variable for a given stock. The percentile rankings for all valid ratios that a stock has are calculated. So, for instance, a stock could have a price-to-book ranking in the 43rd percentile, a price-earnings ranking in the 67th percentile, a price-to-sales ranking in the 23rd percentile, etc. Then, those rankings are averaged for each stock. (A minimum of two valid variables are required, though all six will be used if available.)

Once the average of the individual variables is calculated, that average is ranked against all stocks. Put another way, each stock’s composite valuation is compared to all other stocks. These ranks are then sorted into quintiles from the cheapest 20% (a grade of A) to the most expensive 20% (a grade of F).

As always, we recommend that you conduct proper due diligence and research before investing in any security. We also suggest that investors utilize numerous grades, not just value, when it comes to deciding whether a company is a good fit for their allocation needs.

Aileron Therapeutics Inc’s Value Grade

Value Grade:

Aileron Therapeutics, Inc. is a clinical-stage chemoprotection oncology company. It is focused on developing medicines to make chemotherapy safer. Its ALRN-6924 product is a MDM2/MDMX dual inhibitor that leverages its peptide drug technology, which is designed to activate p53, which in turn upregulates p21, a known inhibitor of the cell replication cycle. ALRN-6924 is the chemoprotective agent in clinical development, which focused on treating patients with p53-mutated cancers. It is developing ALRN-6924 to selectively protect healthy cells in patients with cancers that harbor p53 mutations to reduce or eliminate chemotherapy-induced side effects without interrupting chemotherapy?s destruction of cancer cells. It stabilizes peptides by stapling them with hydrocarbon bonds into their natural alpha-helical conformation. ALRN-6924 can pause cell division in cells with wild type, p53, include normal bone marrow cells and ALRN-6924 has no activity against cancer cells with mutations in p53.

Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are value and so on.

Aileron Therapeutics Inc has a Value Score of 88, which is considered to be undervalued.

Now, let’s assess Aileron Therapeutics Inc’s EV/EBITDA ratio, also known as enterprise multiple. At 0.4, when compared to the industry median of 0.8, the company may be considered undervalued in relation to its peers. Value investors could use the enterprise multiple to identify stocks that are considered overvalued or undervalued relative to their industry.

Shareholder yield is the sum of a stock’s dividend yield (paid over previous 12 months minus special dividends) and the percentage of net share buybacks over the previous 12 months. Aileron Therapeutics Inc’s shareholder yield is higher than its industry median ratio of (10.40%). Value investors may look for an attractive shareholder yield because it can be a powerful tool for identifying if the company has a good management team.

As one of the most common value metrics, the price-to-book ratio evaluates a company’s current market price relative to its book value. Aileron Therapeutics Inc’s price-to-book ratio is lower than its industry median ratio of 1.52. This could make Aileron Therapeutics Inc more attractive to investors looking for a new addition to their portfolio.

InMed Pharmaceuticals Inc’s Value Grade

Value Grade:

InMed Pharmaceuticals Inc. is a clinical-stage pharmaceutical company. The Company is engaged in developing a pipeline of prescription-based products, including rare cannabinoids and cannabinoid analogs, targeting the treatment of diseases with high unmet medical needs, as well as developing proprietary manufacturing technologies to produce rare cannabinoids for sale in the health and wellness industry. Its segments include InMed Pharmaceuticals and BayMedica. The InMed Pharmaceuticals segment is engaged in research and development of cannabinoid-based pharmaceutical products. The BayMedica segment is focused on developing manufacturing technologies to produce rare cannabinoids for sale in the health and wellness industry. Its two product candidates include INM-755 and INM-088. INM-755 is developed as a topical skin cream formulation containing cannabinol (CBN) for the treatment of symptoms related to Epidermolysis Bullosa (EB). INM-088 is used for the treatment of glaucoma.

Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are value and so on.

InMed Pharmaceuticals Inc has a Value Score of 85, which is considered to be undervalued.

InMed Pharmaceuticals Inc’s price-to-book ratio is higher than its peers. This could make InMed Pharmaceuticals Inc less attractive for value investors when compared to the industry median at 1.52.

You can read more about InMed Pharmaceuticals Inc’s key financial metrics like shareholder yield, price-to-free-cash-flow and EV/EBITDA ratio, or learn more about its Momentum and Growth Grades, by subscribing to A+ Investor.

Korro Bio Inc’s Value Grade

Value Grade:

Korro Bio, Inc., formerly Frequency Therapeutics, Inc., is a ribonucleic acid (RNA) editing company focused on the discovery and development of novel genetic medicines. The Company harnesses the body’s natural RNA editing machinery to make single-base RNA edits to modulate protein function. The Company’s Oligonucleotide Promoted Editing of RNA (OPERA) is a foundational platform for RNA editing, which is designed to edit RNA in vivo by delivering an oligonucleotide guide that can target specific RNA sequences. OPERA co-opts the cell’s natural process with its synthetic oligo and catalyzes a single base change to modify protein sequence and function without the need to permanently modify one’s genome. OPERA harnesses the body’s natural base editing system - specifically adenosine deaminase acting on RNA (ADAR) to make targeted edits to a single RNA base. The Company's focus areas include the liver and central nervous system (CNS).

Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are value and so on.

Korro Bio Inc has a Value Score of 74, which is considered to be undervalued.

Korro Bio Inc’s price-to-book ratio is higher than its peers. This could make Korro Bio Inc less attractive for value investors when compared to the industry median at 1.52.

You can read more about Korro Bio Inc’s key financial metrics like shareholder yield, price-to-free-cash-flow and EV/EBITDA ratio, or learn more about its Momentum and Growth Grades, by subscribing to A+ Investor.

Leap Therapeutics Inc’s Value Grade

Value Grade:

Leap Therapeutics, Inc. is a biotechnology company. The Company is focused on developing targeted and immuno-oncology therapeutics. Its advanced clinical candidate, DKN-01, is a humanized monoclonal antibody targeting the Dickkopf-1 (DKK1) protein. DKN-01 is being developed in patients with esophagogastric, gynecologic, and colorectal cancers. DKK1 modulates the Wnt/Beta-catenin and PI3kinase/AKT signaling pathways and promotes tumor proliferation, metastasis, angiogenesis, and in mediating an immune suppressive tumor microenvironment through enhancing the activity of myeloid-derived suppressor cells and downregulating NK cell ligands on tumor cells. The Company?s pipeline includes FL-301, a humanized monoclonal antibody targeting Claudin18.2, being developed in patients with gastric and pancreatic cancer. Claudin18.2 regulates barrier properties and contributes to cell-to-cell adhesion. It also has preclinical antibody programs targeting Claudin18.2/CD137 and GDF15.

Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are value and so on.

Leap Therapeutics Inc has a Value Score of 62, which is considered to be undervalued.

Leap Therapeutics Inc’s price-to-book ratio is higher than its peers. This could make Leap Therapeutics Inc less attractive for value investors when compared to the industry median at 1.52.

You can read more about Leap Therapeutics Inc’s key financial metrics like shareholder yield, price-to-free-cash-flow and EV/EBITDA ratio, or learn more about its Momentum and Growth Grades, by subscribing to A+ Investor.

Invitae Corp’s Value Grade

Value Grade:

Invitae Corporation is a medical genetics company. The Company is engaged in delivering genetic testing services, digital health solutions, and health data services that support a lifetime of patient care and improved outcomes. It offers genetic testing across multiple clinical areas, including hereditary cancer, precision oncology, women's health, rare diseases and pharmacogenomics. It applies proprietary design, process automation, robotics and bioinformatics software solutions to expand the use and impact of genetic information in sample processing and complex variant interpretation, allowing medical interpretation at scale. The Company also utilizes digital health solutions to improve ease-of-use and to deliver actionable information about risk, prevention, treatment, and monitoring. The Company has served over 3.6 million patients, and over 2.2 million of those patients have made their information available for data sharing.

Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are value and so on.

Invitae Corp has a Value Score of 77, which is considered to be undervalued.

You can read more about Invitae Corp’s key financial metrics like shareholder yield, price-to-free-cash-flow and EV/EBITDA ratio, or learn more about its Momentum and Growth Grades, by subscribing to A+ Investor.

Senti Biosciences Inc’s Value Grade

Value Grade:

Senti Biosciences, Inc. is a preclinical biotechnology company. The Company is developing cell and gene therapies engineered with its gene circuit platform technologies to fight challenging diseases. The Company's products include SENTI-202, SENTI-401 and SENTI-301A. It is developing its SENTI-202 product candidate as a Logic Gated (OR + NOT) off-the-shelf CAR-NK cell therapy designed to target and eliminate cancer cells while sparing the healthy bone marrow. SENTI-401 for the potential treatment of colorectal cancer (CRC) and Other Solid Tumors. SENTI-301A for the potential treatment of HCC and Other Solid Tumors. Its gene circuit platform technologies are designed to be applied in a modality-agnostic manner, with applicability to natural killer (NK) cells, T cells, tumor infiltrating lymphocytes (TILs), stem cells, including induced Pluripotent Stem Cells (iPSCs) Hematopoietic Stem Cells (HSCs), in vivo gene therapy, such as adeno associated virus, and messenger ribonucleic acid.

Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are value and so on.

Senti Biosciences Inc has a Value Score of 66, which is considered to be undervalued.

Senti Biosciences Inc’s price-to-book ratio is higher than its peers. This could make Senti Biosciences Inc less attractive for value investors when compared to the industry median at 1.52.

You can read more about Senti Biosciences Inc’s key financial metrics like shareholder yield, price-to-free-cash-flow and EV/EBITDA ratio, or learn more about its Momentum and Growth Grades, by subscribing to A+ Investor.

Xenetic Biosciences Inc’s Value Grade

Value Grade:

Xenetic Biosciences, Inc. is a biopharmaceutical company. The Company is focused on advancing its immune-oncology technologies addressing hard to treat cancers. The Company's DNase platform is designed to improve outcomes of existing treatments, including immunotherapies, by targeting neutrophil extracellular traps (NETs), which are weblike structures composed of extracellular chromatin coated with histones and other proteins. The Company is also developing its personalized Chimeric Antigen Receptor (CAR) T platform technology, XCART, to develop cell-based therapeutics targeting the B-cell receptor on the surface of an individual patient?s malignant tumor cells, for the treatment of B-cell lymphomas. It is also focused on developing its proprietary drug delivery platform, PolyXen, which uses the biological polymer polysialic acid (PSA) to prolong the drug's half-life and potentially improve the stability of therapeutic peptides and proteins.

Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are value and so on.

Xenetic Biosciences Inc has a Value Score of 69, which is considered to be undervalued.

Xenetic Biosciences Inc’s price-to-book ratio is higher than its peers. This could make Xenetic Biosciences Inc less attractive for value investors when compared to the industry median at 1.52.

You can read more about Xenetic Biosciences Inc’s key financial metrics like shareholder yield, price-to-free-cash-flow and EV/EBITDA ratio, or learn more about its Momentum and Growth Grades, by subscribing to A+ Investor.

Other Biotechnology & Medical Research Stock Grades

Value is just one of the five Stock Grades included in our A+ Investor service. AAII members can see the top-graded stocks—those with grades of A or B for value, growth, momentum, earnings estimate revisions and quality—on the A+ Stock Grades Screener.

Also, if you want full access to all of AAII’s premium services, you can subscribe to one convenient bundled plan called AAII Platinum where you can try out A+ Investor, AAII Dividend Investing, the Stock Superstars Report, Growth Investing and VMQ Stocks. With the other premium services, you can dive deep into additional metrics, portfolios, commentary and information about Biotechnology & Medical Research stocks as well as other industrys.

Choosing Which of the 7 Best Biotechnology & Medical Research Stocks Is Right for You

Choosing which value stocks to invest in will ultimately depend on your individual goals and allocation; however, comparing similar value stocks in the same industry can help you analyze which might be better investments for you in the long run. So, let’s take a look at the Value Grade for all of our stocks.

• Aileron Therapeutics Inc stock has a Value Grade of A.
• InMed Pharmaceuticals Inc stock has a Value Grade of A.
• Korro Bio Inc stock has a Value Grade of B.
• Leap Therapeutics Inc stock has a Value Grade of B.
• Invitae Corp stock has a Value Grade of B.
• Senti Biosciences Inc stock has a Value Grade of B.
• Xenetic Biosciences Inc stock has a Value Grade of B.

Now that you have a bit more background about each of the 7 undervalued stocks in the Biotechnology & Medical Research industry as well as their overall grades, it’s time for you to conduct additional research to see if these could fit your portfolio needs based on your goals and risk tolerance. AAII can help you figure out both and identify which investments align with what works best for you.

We do so through a program of education that teaches you to invest for yourself and become an effective manager of your own wealth—no more relying on others for your financial independence. You can rely on AAII for timeless articles on financial planning and stock-picking, unbiased research and actionable analysis that makes you a better investor.

A+ Investor adds to that qualitative teaching by giving you a powerful data suite that helps you whittle down investment decisions to find stocks, exchange-traded funds (ETFs) or mutual funds that meet your needs.

Additional Resources About Biotechnology & Medical Research Stocks

Want to learn more about Biotechnology & Medical Research stocks to see if they could be the right investment for you? Check out some additional resources and articles to help you on your financial journey.

• 7 Undervalued Biotechnology & Medical Research Stocks for Monday, December 04
• Which Is a Better Investment, Beam Therapeutics Inc or Ideaya Biosciences Inc Stock?
• Which Is a Better Investment, Crinetics Pharmaceuticals Inc or Ideaya Biosciences Inc Stock?
• Which Is a Better Investment, Ideaya Biosciences Inc or BIO-TECHNE Corp Stock?

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