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 Thursday, June 22, 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.

Aslan Pharmaceuticals Ltd (ADR)’s Value Grade

Value Grade:

ASLAN Pharmaceuticals Limited is a clinical-stage immunology focused biopharmaceutical company. The Company's portfolio is led by eblasakimab (ASLAN004), a potential human monoclonal antibody that binds to the IL-13 receptor a1 subunit (IL-13Ra1), blocking signaling of two pro-inflammatory cytokines, IL-4 and IL-13, which are central to triggering symptoms of atopic dermatitis, such as redness and itching of the skin. It is conducting a Phase II b clinical trial investigating eblasakimab as a therapeutic antibody for moderate-to-severe atopic dermatitis (AD). The Company is also developing farudodstat (ASLAN003), an orally active, potent inhibitor of human dihydroorotate dehydrogenase (DHODH) that has the potential to be a therapy for autoimmune disease. The Company is also focused on developing antagonists of the aryl hydrocarbon receptor (AhR), an immune checkpoint inhibitor, through a joint venture.

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.

Aslan Pharmaceuticals Ltd (ADR) has a Value Score of 78, which is considered to be undervalued.

Now, let’s assess Aslan Pharmaceuticals Ltd (ADR)’s EV/EBITDA ratio, also known as enterprise multiple. At 0.9, when compared to the industry median of 0.7, the company may be considered overvalued 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. Aslan Pharmaceuticals Ltd (ADR)’s shareholder yield is lower than its industry median ratio of (6.34%). 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. Aslan Pharmaceuticals Ltd (ADR)’s price-to-book ratio is lower than its industry median ratio of 1.80. This could make Aslan Pharmaceuticals Ltd (ADR) more attractive to investors looking for a new addition to their portfolio.

Diffusion Pharmaceuticals Inc’s Value Grade

Value Grade:

Diffusion Pharmaceuticals, Inc. is a biopharmaceutical company. The Company is focused on developing novel therapies that may enhance the body?s ability to deliver oxygen to the areas. Its advanced product candidate, Trans Sodium Crocetinate (TSC), is developed to enhance the diffusion of oxygen to tissues with low oxygen levels, also known as hypoxia, a serious complication of many of medicine?s intractable and difficult-to-treat conditions, including hypoxic solid tumors, such as GBM. TSC is the therapeutic candidate specifically designed to enhance the oxygen diffusion process. By supporting normal, physiologic levels of oxygen diffusion at the uptake and delivery points of the circulatory system. Hypoxia is a complicating factor in many other intractable and difficult-to-treat conditions, including cardiovascular diseases, cerebrovascular diseases, respiratory diseases, skin and soft tissue diseases, and neurodegenerative 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.

Diffusion Pharmaceuticals Inc has a Value Score of 95, which is considered to be undervalued.

Diffusion Pharmaceuticals Inc’s price-to-book ratio is higher than its peers. This could make Diffusion Pharmaceuticals Inc less attractive for value investors when compared to the industry median at 1.80.

You can read more about Diffusion 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.

Immunic Inc’s Value Grade

Value Grade:

Immunic, Inc. is a clinical-stage biopharmaceutical company with a pipeline of selective oral immunology therapies focused on treating chronic inflammatory and autoimmune diseases. It is engaged in the clinical development of three orally administered, small molecule programs to address the unmet needs of patients. These include the vidofludimus calcium (IMU-838) program, which is focused on the development of oral formulations of a small molecule inhibitor of the enzyme dihydroorotate dehydrogenase (DHODH); the IMU-935 program, which is focused on an inverse agonist of retinoic acid receptor-related orphan nuclear receptor gamma truncated (RORyt), an immune cell-specific isoform of RORy; and the IMU-856 program, which involves the development of a drug targeting the restoration of intestinal barrier function and regeneration of bowel epithelium. These product candidates are being developed to address diseases such as multiple sclerosis (MS), psoriasis and gastrointestinal 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.

Immunic Inc has a Value Score of 68, which is considered to be undervalued.

Immunic Inc’s price-to-book ratio is higher than its peers. This could make Immunic Inc less attractive for value investors when compared to the industry median at 1.80.

You can read more about Immunic 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.

Biomx Inc’s Value Grade

Value Grade:

BiomX Inc., formerly Chardan Healthcare Acquisition Corp., is a microbiome company. The Company is focused on developing both natural and engineered phage therapies. It develops therapies to target and destroy bacteria that affect the appearance of skin, as well as harmful bacteria in chronic diseases, such as inflammatory bowel disease (IBD), primary sclerosing cholangitis (PSC) and cancer. The Company discovers and validates bacterial targets and customizes phage compositions against the targets. Its pipeline includes BX001, BX002 and BX003. BX001 is a product candidate that improves the appearance of acne-prone skin. BX002 is a customized phage cocktail that eradicates bacterial targets associated with the onset of IBD. BX003 is a customized phage cocktail developed against specific strains of Klebsiella pneumoniae (Kp).

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.

Biomx Inc has a Value Score of 81, which is considered to be undervalued.

Biomx Inc’s price-to-book ratio is higher than its peers. This could make Biomx Inc less attractive for value investors when compared to the industry median at 1.80.

You can read more about Biomx 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.

Revelation Biosciences Inc’s Value Grade

Value Grade:

Revelation Biosciences, Inc. is a clinical-stage biopharmaceutical company engaged in the development of innate immune system therapeutics and diagnostics. Its therapeutic candidates are based on the active ingredient phosphorylated hexaacyl disaccharide (PHAD), a synthetic version of monophosphoryl lipid A (MPLA) that is known to stimulate Toll-like receptor 4 (TLR-4). Its product candidates include REVTx-300, which is being developed as a potential therapy for the prevention and treatment of acute organ injury and chronic organ disease; REVTx-100, which is being developed for the prevention and treatment of infections, including healthcare-associated bacterial infections resulting from surgery, severe burns, and antibiotic resistance; REVTx-200, which is being developed as a potential intranasal therapy that is administered with a traditional commercially available intramuscular (IM) vaccine, and REVTx-99b, which is being developed as a treatment for food allergies.

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.

Revelation Biosciences Inc has a Value Score of 71, which is considered to be undervalued.

Revelation Biosciences Inc’s price-to-book ratio is higher than its peers. This could make Revelation Biosciences Inc less attractive for value investors when compared to the industry median at 1.80.

You can read more about Revelation 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.

XORTX Therapeutics Inc’s Value Grade

Value Grade:

XORTX Therapeutics Inc. is a pharmaceutical company. The Company is focused on identifying, developing and commercializing therapies to treat progressive kidney disease modulated by aberrant purine and uric acid metabolism in orphan (rare) disease indications, such as autosomal dominant polycystic kidney disease (ADPKD) and type 2 diabetic nephropathy (T2DN) as well as acute kidney injury (AKI) associated with coronavirus infection. Its three lead product candidates are XRx-008, for the treatment of ADPKD; XRx-101, to treat AKI associated with Coronavirus / COVID-19 infection, AKI and associated health consequences. In addition, XRx-225 is a pre-clinical stage program for type 2 diabetic nephropathy. It is working to advance its clinical development stage products that target aberrant purine metabolism and xanthine oxidase to decrease or inhibit production of uric acid. The Company is evaluating xanthine oxidase inhibitor candidates for the XRx-225 program to treat T2DN.

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.

XORTX Therapeutics Inc has a Value Score of 65, which is considered to be undervalued.

XORTX Therapeutics Inc’s price-to-book ratio is higher than its peers. This could make XORTX Therapeutics Inc less attractive for value investors when compared to the industry median at 1.80.

You can read more about XORTX 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.

Zymeworks Inc’s Value Grade

Value Grade:

Zymeworks Inc. is a global biotechnology company. The Company is engaged in the discovery, development, and commercialization of multifunctional biotherapeutics to treat cancer and other serious diseases. Its lead product candidate, zanidatamab, is a bispecific antibody that targets two distinct domains of the human epidermal growth factor receptor 2 (HER2). Its second product candidate, zanidatamab zovodotin, combines the biparatopic antibody design of zanidatamab with its ZymeLink auristatin antibody-drug conjugate (ADC) technology, comprised of its cytotoxin (cancer cell-killing compound) and cleavable linker. It is also advancing a pipeline of preclinical product candidates and discovery-stage programs in oncology (including immuno-oncology agents) and other therapeutic areas with an emphasis on developing ADC and multi-specific antibody therapeutics (MSAT) candidates. Its pipeline of preclinical product candidates includes two lead programs, ZW191 and ZW17.

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.

Zymeworks Inc has a Value Score of 82, which is considered to be undervalued.

Zymeworks Inc’s price-earnings ratio is 3.2 compared to the industry median at 12.0. This means that it has a lower price relative to its earnings compared to its peers. This makes Zymeworks Inc more attractive for value investors.

Zymeworks Inc’s price-to-book ratio is higher than its peers. This could make Zymeworks Inc less attractive for value investors when compared to the industry median at 1.80.

You can read more about Zymeworks 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.

• Aslan Pharmaceuticals Ltd (ADR) stock has a Value Grade of B.
• Diffusion Pharmaceuticals Inc stock has a Value Grade of A.
• Immunic Inc stock has a Value Grade of B.
• Biomx Inc stock has a Value Grade of A.
• Revelation Biosciences Inc stock has a Value Grade of B.
• XORTX Therapeutics Inc stock has a Value Grade of B.
• Zymeworks Inc stock has a Value Grade of A.

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 Thursday, June 22
• 3 Undervalued Biotechnology & Medical Research Stocks for Wednesday, June 21
• Is Azitra Inc (AZTR) Stock a Good Investment?
• Why 4D Molecular Therapeutics Inc’s (FDMT) Stock Is Down 9.22%

AAII Disclaimer

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