Based on key financial metrics such as the price-to-sales ratio, shareholder yield and the price-earnings ratio, the following 5 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.

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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5 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 5 undervalued stocks in the Biotechnology & Medical Research industry for Thursday, July 25, 2024. 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.

Arca Biopharma Inc’s Value Grade

Value Grade:

ARCA biopharma, Inc. is a clinical-stage biopharmaceutical company engaged in developing genetically and other targeted therapies for cardiovascular diseases through a precision medicine approach to drug development. The Company's lead product candidate is Gencaro (bucindolol hydrochloride) for the treatment of atrial fibrillation (AF) in patients with chronic heart failure (HF). Gencaro is being developed for patients who have a genotype that identifies a drug target associated with heightened efficacy. Gencaro is a pharmacogenetically-targeted beta-adrenergic receptor antagonist with mild vasodilator properties that is developing for the treatment of atrial fibrillation in patients with heart failure. Its Recombinant Nematode Anticoagulant Protein c2 (rNAPc2) (AB201), is a protein therapeutic in clinical development as a potential treatment for patients with COVID-19. It is also evaluating options for development of its assets, including partnering and other strategic options.

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.

Arca Biopharma Inc has a Value Score of 80, which is considered to be undervalued.

Now, let’s assess Arca Biopharma Inc’s EV/EBITDA ratio, also known as enterprise multiple. At 1.3, when compared to the industry median of 1.6, 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. Arca Biopharma Inc’s shareholder yield is higher than its industry median ratio of (15.12%). 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. Arca Biopharma Inc’s price-to-book ratio is lower than its industry median ratio of 1.93. This could make Arca Biopharma Inc more attractive to investors looking for a new addition to their portfolio.

Adial Pharmaceuticals Inc’s Value Grade

Value Grade:

Adial Pharmaceuticals, Inc. is a clinical-stage biopharmaceutical company. The Company is focused on the development of treatments for addictions and related disorders. The Company’s lead investigational new drug product, AD04, is a genetically targeted, serotonin-3 receptor antagonist, therapeutic agent for the treatment of Alcohol Use Disorder (AUD) in heavy drinking patients. AD04 is investigated in the Company’s ONWARD pivotal Phase III clinical trial for the treatment of AUD in subjects with certain target genotypes (estimated to be approximately one-third of the AUD population) identified using the Company’s companion diagnostic genetic test. AD04 is also used for the treatment of other addictive disorders, such as Opioid Use Disorder, obesity, smoking, and other drug addictions. The Company’s wholly owned subsidiary is Purnovate, Inc.

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.

Adial Pharmaceuticals Inc has a Value Score of 71, which is considered to be undervalued.

Adial Pharmaceuticals Inc’s price-to-book ratio is higher than its peers. This could make Adial Pharmaceuticals Inc less attractive for value investors when compared to the industry median at 1.93.

You can read more about Adial 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.

Protara Therapeutics Inc’s Value Grade

Value Grade:

Protara Therapeutics, Inc. is a clinical-stage biotechnology company, which is engaged in advancing transformative therapies for people with cancer and rare diseases. The Company’s portfolio includes its lead candidate, TARA-002, an investigational cell-based therapy in development for the treatment of non-muscle invasive bladder cancer (NMIBC) and lymphatic malformations (LMs). The Company is evaluating TARA-002 in an ongoing Phase II trial in NMIBC patients with carcinoma in situ (CIS) who are unresponsive or naive to treatment with Bacillus Calmette-Guerin (BCG), as well as a Phase II trial in pediatric patients with LMs. In addition, the Company is developing IV Choline Chloride, an investigational phospholipid substrate replacement for patients on parenteral nutrition who are otherwise unable to meet their choline needs via oral or enteral routes.

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.

Protara Therapeutics Inc has a Value Score of 93, which is considered to be undervalued.

Protara Therapeutics Inc’s price-to-book ratio is higher than its peers. This could make Protara Therapeutics Inc less attractive for value investors when compared to the industry median at 1.93.

You can read more about Protara 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.

Theriva Biologics Inc’s Value Grade

Value Grade:

Theriva Biologics, Inc. is a diversified clinical-stage company developing therapeutics designed to treat cancer and related diseases in areas of high unmet need. It is advancing a new oncolytic adenovirus platform. Its candidates are VCN-01, SYN-004 (ribaxamase) and SYN-020. VCN-01 is an oncolytic adenovirus designed to replicate selectively and aggressively within tumor cells, and to degrade the tumor stroma barrier that serves as a significant physical and immunosuppressive barrier to cancer treatment. SYN-004 (ribaxamase) is designed to degrade certain commonly used intravenous beta-lactam antibiotics within the gastrointestinal (GI) tract to prevent microbiome damage. SYN-020 is a recombinant oral formulation of the enzyme intestinal alkaline phosphatase produced under current good manufacturing practice conditions and intended to treat both local GI and systemic diseases. Its research programs include VCN-11 Albumin Shield Technology and SYN-006, SYN-007, other oncolytic virus.

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.

Theriva Biologics Inc has a Value Score of 87, which is considered to be undervalued.

Theriva Biologics Inc’s price-to-book ratio is higher than its peers. This could make Theriva Biologics Inc less attractive for value investors when compared to the industry median at 1.93.

You can read more about Theriva Biologics 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.

Windtree Therapeutics Inc’s Value Grade

Value Grade:

Windtree Therapeutics, Inc. is a biotechnology company. The Company is focused on advancing early and late-stage therapies for critical conditions and diseases. The Company’s portfolio of product candidates includes istaroxime, a Phase II candidate with SERCA2a activating properties for acute heart failure and associated cardiogenic shock, pre-clinical SERCA2a activators for heart failure and VAR-101 and VAR-102, pre-clinical precision atypical protein kinase C iota (aPKCi) inhibitors that are being developed for potential in rare and broad oncology applications. Istaroxime is a positive inotropic agent that increases myocardial contractility through inhibition of Na+/K+- ATPase with a complimentary mechanism that facilitates myocardial relaxation through activation of the SERCA2a calcium pump on the sarcoplasmic reticulum, enhancing calcium reuptake from the cytoplasm. It also has a licensing business model with partnership out-licenses in place.

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.

Windtree Therapeutics Inc has a Value Score of 100, which is considered to be undervalued.

Windtree Therapeutics Inc’s price-earnings ratio is 0.2 compared to the industry median at 27.9. This means that it has a lower price relative to its earnings compared to its peers. This makes Windtree Therapeutics Inc more attractive for value investors.

Windtree Therapeutics Inc’s price-to-book ratio is higher than its peers. This could make Windtree Therapeutics Inc less attractive for value investors when compared to the industry median at 1.93.

You can read more about Windtree 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.

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 5 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.

• Arca Biopharma Inc stock has a Value Grade of B.
• Adial Pharmaceuticals Inc stock has a Value Grade of B.
• Protara Therapeutics Inc stock has a Value Grade of A.
• Theriva Biologics Inc stock has a Value Grade of A.
• Windtree Therapeutics Inc stock has a Value Grade of A.

Now that you have a bit more background about each of the 5 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.

• 5 Undervalued Biotechnology & Medical Research Stocks for Thursday, July 25
• 4 Undervalued Biotechnology & Medical Research Stocks for Wednesday, July 24
• What You Need to Know About Alkermes Plc's Q2 Earnings
• What You Need to Know About ICON PLC's Q1 Earnings

AAII Disclaimer

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