Four Dividend-paying Biopharmaceutical Investments to Buy Use Genetics to Produce Growth and Income

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Health Care

Four dividend-paying biopharmaceutical investments to buy use genetics to produce growth and income amid the pandemic.

The four biopharmaceutical investments to buy that use genetics include two biopharmaceutical industry giants that have been building their genomic capabilities in recent years, as well as two exchange-traded funds that offer some exposure to the sector and hold enough traditional pharmaceutical stocks to provide investors a modest dividend yield. I am among those who are hoping and praying that genetic research breakthroughs one day may provide long-sought treatments for muscular dystrophy, amyotrophic lateral sclerosis (ALS) and other diseases.

“Biotechnology stocks have been doing well recently, and that’s likely to continue,” said Bob Carlson, leader of the Retirement Watch investment newsletter. “Companies continue to announce breakthroughs, and a number of biotech companies are going public.”

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Pension fund and Retirement Watch leader Bob Carlson answers questions from columnist Paul Dykewicz.

Four Dividend-paying Biopharmaceutical Investments to Buy Use Promising Genomic Medicine

“The field of genomic medicine is one of the most promising new areas in medicine,” said Jim Woods, editor of Intelligence Report and Successful Investing.

However, the favorite genomic medicine stocks of Woods are focused on growth and do not pay dividends.

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Columnist Paul Dykewicz meets with Jim Woods, who heads the Intelligence Report and Successful Investing newsletters.

Genomic medicine stocks are part of the biopharmaceuticals category that is backed by an average of 3.5 years of cash to fund research and development (R&D) initiatives, compared to just 1.5 years at the peak of the 2008-09 financial crisis, according to BoA Global Research.

Funding of biopharmaceutical stocks has jumped since 2015, with more than $550 billion in cash amassed to keep these companies advancing their R&D programs, BoA wrote in a research note. Global spending on medicines is projected to produce a 3-6% compound annual growth rate (CAGR) through 2025 to total about $1.6 trillion, excluding spending on COVID-19 vaccines, according to a recent report by the IQVIA Institute for Human Data Science (NYSE:IQV). The report, “The Global Spending and Usage of Medicines,” relied on invoice price levels to forecast cumulative spending of $157 billion on COVID-19 vaccines through 2025, with the first wave of vaccines focused on approval by 2022.

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Four Dividend-paying Biopharmaceutical Investments to Buy Include Acquirers of Genomics Companies

Two major pharmaceutical companies that have expanded into biopharmaceutical and genetic treatments heavily are New York-based Bristol-Myers Squibb Inc. (NYSE:BMY) and Eli Lilly (NYSE:LLY).

“The real distinction for me at this point isn’t really about whether a drug developer draws on biotech materials or more conventional chemistry in order to treat illness,” said Hilary Kramer, who heads the GameChangers and Value Authority advisory services.

Chart courtesy of www.StockCharts.com

The first standalone biotech companies that went public in the 1980s have grown to be able to go “toe-to-toe” with big pharmaceutical companies and, in some cases, are now integrated into industry behemoths, Kramer continued. For example, Bristol-Myers Squibb acquired Celgene, said Kramer, who hosts the “Millionaire Maker” radio program and won a 2021 Gracie Award from the Alliance for Women in Media Foundation (AWMF) for the commercially syndicated program.

Paul Dykewicz interviews Hilary Kramer, who leads IPO Edge, 2-Day Trader, Turbo Trader and Inner Circle.

Eli Lilly Is One of Four Dividend-paying Biopharmaceutical Investments to Buy to Support Genomics

Eli Lilly and Company (NYSE:LLY) received a buy rating and a $225 price objective from BoA, based on its probability-adjusted net present value (NPV) analysis. The company’s key businesses and their valuations, according to BoA, include Neuroscience ($33/share), Oncology ($70/share), Immunology & Inflammation ($33/share), Diabetes ($89/share), and other pharmaceutical products and early pipeline assets ($15/share), with approximately -$15/share in net cash.

Possible risks to BoA’s $225 price objective are better-than-expected launches of competing products, emerging clinical data for pipeline assets that do not confirm prior observations, any failure to effectively commercialize approved products and potential drug pricing system restructuring in the United States. The company also received a subpoena in May 2021 from the U.S. Department of Justice requesting the production of certain documents relating to its manufacturing site in Branchburg, New Jersey.

Eli Lilly previously hired external counsel to conduct an independent investigation of certain allegations relating to its Branchburg manufacturing site. Eli Lilly, through its counsel, announced it is investigating the allegations thoroughly and cooperating fully with the investigation.

The negative news appeared to hurt the company’s stock price, but not profoundly. Such events can provide investors who are interested in buying shares a chance to do so at a slight discount.

Chart courtesy of www.StockCharts.com

iShares Biotechnology Earns Berth Among Four Dividend-paying Biopharmaceutical Investments to Buy

Carlson recommends a diversified exchange-traded fund (ETF) for most investors. However, even that is difficult, because of differences in the stocks held by the leading ETFs. The best move might be to hold positions in the two leading biotech ETFs, he concluded.

iShares Biotechnology (IBB) is designed to track the NASDAQ Biotechnology Index. So, it holds only stocks listed on the NASDAQ that are classified as either biotechnology or pharmaceutical companies, Carlson said. IBB tends to be the more volatile of the two funds and, over some periods, its returns can be substantially higher or lower than alternatives, Carlson cautioned.

Chart courtesy of www.StockCharts.com

Despite the volatility, IBB rose 25.21% in 2019, 26.01% in 2020 and 7.79% so far in 2021. Its annualized return is 14.24% for three years and 14.71% during the past five years, Carlson said.

Chart courtesy of www.StockCharts.com

SPDR S&P Biotech Snags Spot Among Four Dividend-paying Biopharmaceutical Investments to Buy

The other ETF Carlson recommended is SPDR S&P Biotech (XBI). That fund aims to track the S&P Biotechnology Select Industry Index. That biotech index is derived from a U.S. total market composite, so it is not limited to S&P 500 stocks. Instead, XBI uses a sampling strategy to try to track the index instead of holding all the stocks in the index.

“XBI tends to favor stocks with greater liquidity, so it doesn’t own many smaller companies or those with limited trading volume,” Carlson said.

Though it is less volatile than IBB, XBI is more volatile than the market indexes and the health care sector overall. The fund produced returns of 32.56% in 2019 and 48.33% in 2020, but so far in 2021 it has slipped 1.46%. Plus, the fund’s annualized returns are 13.01% during the past three years and 21.94% in the last five years.

Chart courtesy of www.StockCharts.com

CRISPR Therapeutics Offers Alternative to Four Biopharmaceutical Investments to Buy for Genomics

CRISPR Therapeutics (NASDAQ:CRSP), a non-dividend-paying, Swiss-American biotechnology company based in Zug, Switzerland, received an upgrade to “outperform” by Evercore ISI on May 13, along with a price target of $125 that the company has blown past in less than two months. The stock also roared beyond its $134 price target set by Citi when it boosted a rating on the stock to “neutral” from “sell” on June 11.

CRISPR Therapeutics is a biopharmaceutical company focused on developing what its management calls “transformative, gene-based medicines” for serious diseases. The company formed a partnership with Capsida Biotherapeutics Inc, which is dedicated to developing breakthrough gene therapies using fully integrated adeno-associated virus (AAV) engineering. The two companies collaborate to research, develop, manufacture and commercialize in vivo gene editing therapies that are delivered with engineered AAV vectors to treat familial amyotrophic lateral sclerosis (ALS) and Friedreich’s ataxia.

Four Dividend-paying Biopharmaceutical Investments to Buy for Genomics Breakthroughs Gain Lift 

Under the agreement, CRISPR Therapeutics will lead research and development of the Friedreich’s ataxia program and perform gene-editing activities for both programs, while Capsida will spearhead research and development of the ALS program and conduct capsid engineering for both endeavors. Capsida’s high-throughput AAV engineering platform generates capsids designed to target specific tissue types and to limit transduction of tissues and cell types that are not relevant to the target disease in hopes of improving efficacy and safety.

CRISPR Therapeutics and Capsida each have the option to co-develop and co-commercialize the program that the other company leads. The companies would share equally all research, development and commercialization costs and profits of the collaboration.

Chart courtesy of www.StockCharts.com

Woods Weighs in on the Four Dividend-paying Biopharmaceutical Stocks to Buy for Genomics Advances

Woods wrote in June that CRSIPR announced positive data from clinical trials for CTX001, a potential one-time therapy under development with Boston-based Vertex Pharmaceuticals Inc. (NASDAQ:VRTX) for patients enduring transfusion-dependent beta thalassemia and severe sickle cell disease.

“Blood disease therapies and other debilitating diseases that can be treated and cured by genomic companies are the next phase of this profoundly promising medical technology,” Woods opined.

BioNano Genomics Inc. (NASDAQ:BNGO), of San Diego, California, announced on July 6 that it has attained “significant progress” in China with the adoption of its Saphyr System for optical genome mapping (OGM) by WeHealth Shanghai, a provider of genome analysis services for reproductive health. The adoption was discussed at the Structural Variation Symposium in Shanghai, organized with support from the Shanghai Society of Genetics.

Chart courtesy of www.StockCharts.com

Multiple presentations were delivered on reproductive health at the symposium, with speakers highlighting a sizable need and opportunity in China with approximately 16 million births annually. Dr. Xiangdong Kong, based at The First Affiliated Hospital of Zhengzhou University, reported using optical genome mapping for prenatal testing in families with a history of facioscapulohumeral muscular dystrophy (FSHD), a form of muscular dystrophy.

BioNano Genomics received a “buy” recommendation on June 16 from the New York-based BTIG investment firm, along with a $10 price target. That projection would mark a 49.3% increase from the company’s price of $6.70 price late in the trading day on July 9.

Intellia Therapeutics Misses Making List of Four Dividend-paying Biopharmaceutical Stocks to Buy

Intellia Therapeutics Inc. (NASDAQ:NTLA), a Cambridge, Massachusetts-based biopharmaceutical company, is another recommendation of Woods but he is not the only one to like the stock. Another is money manager Hilary Kramer, who heads the GameChangers and Value Authority advisory services.

“We can rewrite the liver and other organs to remove genetic faults and, in theory, program tired tissue to rejuvenate itself,” Kramer said. “The hard part took years, but it’s over.”

Now, NTLA needs to develop specific applications, Kramer said. The real risk and returns have played out in the favor of shareholders with vision and long-term conviction, she added.

Chart courtesy of www.StockCharts.com

List of Four Dividend-paying Biopharmaceutical Investments to Buy Omits Editas Medicine 

“Editas Medicine Inc. (NASDAQ:EDIT) has more room to run,” Kramer counseled. “Even if it only recovers its 52-week high, people who come in now can do quite well for themselves. The key is to keep your eyes on the frontier as technologies that felt like a dream years ago move inexorably toward commercialization.”

Chart courtesy of www.StockCharts.com

Non-dividend-paying CRSP, NTLA and Cambridge, Massachusetts-based EDIT do not qualify among the four biopharmaceutical investments to buy to capture genetic advances. Another non-dividend-payer is Precision BioSciences Inc. (NASDAQ:DTIL), a Durham, North Carolina-based clinical stage biotechnology company that is developing allogeneic CAR T and in vivo gene correction therapies with its ARCUS genome editing platform.

“That’s where the long-term gains happen,” Kramer said.

For that reason, Kramer identified Precision BioSciences as her favorite genetic drug stock for the long run.

“That end of the industry provides the kind of experience a lot of investors want from biotech,” Kramer said.

Chart courtesy of www.StockCharts.com

Four Dividend-Paying Biopharmaceutical Investments to Buy Feature Genomics Amid COVID-19 Spread

The Delta variant of COVID-19 that has hit almost every state in America is raising concerns among health officials about potential new spikes in case numbers. Genetic variants of SARS-CoV-2 have been emerging and circulating worldwide throughout the COVID-19 pandemic, according to the Centers for Disease Control and Prevention (CDC).

A variant has one or more mutations that differentiate it from other varieties currently in circulation. The Delta variant is expected to become the dominant coronavirus strain in the United States, the CDC director recently said. With only 47.8%, or 158,629,431 people, in the U.S. population fully vaccinated, public health officials warn a resurgence of Covid-19 cases may occur this fall when many unvaccinated children are scheduled to go back to school.

Progress in COVID-19 vaccinations raises hope that new cases and deaths will be slowed. As of July 9, 183,542,871 people, or 55.3% of the U.S. population, have received at least one dose. President Joe Biden is among the elected officials in the United States who are encouraging people in the country who are eligible for COVID-19 vaccinations to obtain them.

The Food and Drug Administration (FDA) recently approved a third COVID-19 vaccine, manufactured by Johnson & Johnson (NYSE:JNJ), and that one requires just one does rather than the two doses needed with the first two vaccine providers: Pfizer (NYSE:PFE) and Moderna (NASDAQ:MRNA).

Genomics Offer Hope From Four Dividend-Paying Biopharmaceutical Investments to Buy

COVID-19 cases worldwide totaled 184,546,452 and 3,991,715 deaths, as of July 9, according to Johns Hopkins University. U.S. COVID-19 cases reached 33,746,452 and have led to 605,905 deaths. America has the dreaded distinction as the country with the most COVID-19 cases and deaths.

The four dividend-paying biopharmaceutical investments to buy offer ways to support genomic research initiatives while seeking growth and income. Increased COVID-19 vaccine availability, an improving economy and a recent $1.9 trillion federal stimulus package may lift the valuations of the four biopharmaceutical investments to buy to reach heightened valuations as genetic research progress and potential breakthroughs are achieved.

Paul Dykewicz, www.pauldykewicz.com, is an accomplished, award-winning journalist who has written for Dow Jones, the Wall Street JournalInvestor’s Business DailyUSA Today, the Journal of Commerce, Seeking Alpha, GuruFocus and other publications and websites. Paul, who can be followed on Twitter @PaulDykewicz, is the editor of StockInvestor.com and DividendInvestor.com, a writer for both websites and a columnist. He further is editorial director of Eagle Financial Publications in Washington, D.C., where he edits monthly investment newsletters, time-sensitive trading alerts, free e-letters and other investment reports. Paul previously served as business editor of Baltimore’s Daily Record newspaper. Paul also is the author of an inspirational book, “Holy Smokes! Golden Guidance from Notre Dame’s Championship Chaplain,” with a foreword by former national championship-winning football coach Lou Holtz. The book is great as a gift and is endorsed by Joe Montana, Joe Theismann, Ara Parseghian, “Rocket” Ismail, Reggie Brooks, Dick Vitale and many others. Call 202-677-4457 for special Father’s Day gift pricing!

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