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.

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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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 Wednesday, January 11, 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.

Applied Molecular Transport Inc.’s Value Grade

Value Grade:

Applied Molecular Transport Inc. is a clinical-stage biopharmaceutical company. The Company is leveraging its technology platform to design and develop a pipeline of oral biologic product candidates to treat autoimmune, inflammatory, metabolic, and other diseases. The Company is building a portfolio of oral product candidates based on its technology platform, including AMT-101, an oral gastrointestinal (GI)-selective oral fusion of interleukin 10 (IL-10) that has completed a Phase 1b clinical trial in patients with ulcerative colitis (UC). The Company’s other product candidate, AMT-126, is a GI-selective oral fusion of interleukin 22 (IL-22). Its technology platform enables it to design and develop various oral biologic therapeutic modalities, such as peptides, proteins, full-length antibodies, antibody fragments, and ribonucleic acid (RNA) therapeutics with development-stage drugs.

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.

Applied Molecular Transport Inc. has a Value Score of 94, which is considered to be undervalued.

Now, let’s assess Applied Molecular Transport Inc.’s EV/EBITDA ratio, also known as enterprise multiple. At 0.3, when compared to the industry median of 0.9, 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. Applied Molecular Transport Inc.’s shareholder yield is higher than its industry median ratio of (5.16%). 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. Applied Molecular Transport Inc.’s price-to-book ratio is lower than its industry median ratio of 1.61. This could make Applied Molecular Transport Inc. more attractive to investors looking for a new addition to their portfolio.

Ironwood Pharmaceuticals, Inc.’s Value Grade

Value Grade:

Ironwood Pharmaceuticals, Inc. is a gastrointestinal (GI) healthcare company that is focused on the development and commercialization of GI products in areas of unmet need, including irritable bowel syndrome with constipation (IBS C), and chronic idiopathic constipation (CIC). It operates in the human therapeutics business segment. Its product candidate LINZESS (linaclotide) is available to adult men and women suffering from IBS-C or CIC in the United States, and Mexico and to adult men and women suffering from IBS-C. Its linaclotide is available under the trademarked name CONSTELLA to adult men and women suffering from IBS-C or CIC in Canada, and to adult men and women suffering from IBS-C in certain European countries. The Company’s products pipeline includes IW-3300, which is a GC-C agonist, for the potential treatment of visceral pain conditions, including interstitial cystitis/bladder pain syndrome and endometriosis, and CNP-104 is a tolerizing immune modifying nanoparticle.

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.

Ironwood Pharmaceuticals, Inc. has a Value Score of 64, which is considered to be undervalued.

Ironwood Pharmaceuticals, Inc.’s price-earnings ratio is 12.2 compared to the industry median at 12.5. This means that it has a lower price relative to its earnings compared to its peers. This makes Ironwood Pharmaceuticals, Inc. more attractive for value investors.

Ironwood Pharmaceuticals, Inc.’s price-to-book ratio is lower than its peers. This could make Ironwood Pharmaceuticals, Inc. more attractive for value investors when compared to the industry median at 1.61.

You can read more about Ironwood 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.

Nabriva Therapeutics PLC - ADR’s Value Grade

Value Grade:

Nabriva Therapeutics plc is a biopharmaceutical company. The Company is engaged in the commercialization and research and development of anti-infective agents to treat serious infections. Its products include SIVEXTRO and XENLETA, as well as one development product candidate, CONTEPO. SIVEXTRO product is an oxazolidinone class antibiotic to treat susceptible Gram-positive pathogens, including methicillin-resistant staphylococcus aureus (MRSA). XENLETA product is designed to inhibit the synthesis of a specific protein on the bacterial ribosome, which is required for bacteria to grow, by binding with high affinity and specificity at molecular targets that are different than other available antibiotic classes causing cell death. CONTEPO is an investigational IV antibiotic in the United States with a spectrum of Gram-negative and Gram-positive activity, including activity against MDR strains, such as extended-spectrum ß-lactamase-, or ESBL-producing Enterobacteriaceae.

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.

Nabriva Therapeutics PLC - ADR has a Value Score of 81, which is considered to be undervalued.

Nabriva Therapeutics PLC - ADR’s price-to-book ratio is higher than its peers. This could make Nabriva Therapeutics PLC - ADR less attractive for value investors when compared to the industry median at 1.61.

You can read more about Nabriva Therapeutics PLC - ADR’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., formerly Synthetic Biologics, Inc., is a diversified clinical-stage company developing therapeutics designed to treat diseases in areas of unmet need. The Company is engaged in the development of oncolytic adenovirus platform designed for intravenous (IV), intravitreal and antitumoral delivery to trigger tumor cell death, improve access of co-administered cancer therapies to the tumor, and promote a sustained anti-tumor response by the patient's immune system. Its lead candidates are: VCN-01, an oncolytic adenovirus designed to replicate selectively and aggressively within tumor cells, and to degrade the tumor stroma barrier; SYN-004 (ribaxamase) which is designed to degrade IV beta-lactam antibiotics within the gastrointestinal (GI) tract, and SYN-020, a recombinant oral formulation of the enzyme intestinal alkaline phosphatase (IAP) produced under current good manufacturing practice (cGMP) conditions and intended to treat both local GI and systemic diseases.

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 82, 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 1.61.

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.

Tempest Therapeutics Inc’s Value Grade

Value Grade:

Tempest Therapeutics, Inc. (Tempest) is a clinical-stage oncology company. The Company is focused on developing therapeutics that combine both targeted and immune-mediated mechanisms to treat a wide range of tumors. The Company’s two clinical programs include TPST-1495 and TPST-1120. TPST-1120 is a selective antagonist of peroxisome proliferator-activated receptor. TPST-1120 is in Phase I and II trials in solid tumors, including a global randomized Phase Ib/II trial in combination with the standard-of-care first-line regimen of atezolizumab and bevacizumab in patients with advanced or metastatic hepatocellular carcinoma (HCC). TPST-1495, is a dual antagonist of EP2 and EP4, receptors of prostaglandin E2, and is in a Phase I monotherapy and combination trial in solid tumors.

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.

Tempest Therapeutics Inc has a Value Score of 72, which is considered to be undervalued.

Tempest Therapeutics Inc’s price-to-book ratio is higher than its peers. This could make Tempest Therapeutics Inc less attractive for value investors when compared to the industry median at 1.61.

You can read more about Tempest 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.

• Applied Molecular Transport Inc. stock has a Value Grade of A.
• Ironwood Pharmaceuticals, Inc. stock has a Value Grade of B.
• Nabriva Therapeutics PLC - ADR stock has a Value Grade of A.
• Theriva Biologics Inc stock has a Value Grade of A.
• Tempest Therapeutics Inc stock has a Value Grade of B.

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 Wednesday, January 11
• Which Is a Better Investment, Arrowhead Pharmaceuticals Inc or Ascendis Pharma A/S Stock?
• Which Is a Better Investment, Arrowhead Pharmaceuticals Inc or Maravai Lifesciences Holdings Inc Stock?
• Which Is a Better Investment, Arrowhead Pharmaceuticals Inc or Revance Therapeutics Inc Stock?

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