What could be better than viable enterprises within the biotechnology industry? Try biotech stocks under $10.
Primarily, the reason why the sector is so popular among investors is its potential for addressing various diseases and conditions. Obviously, there’s the human component of lengthening life and its quality. However, economic considerations exist as well. According to one study published by the National Institutes of Health’s website, the total cost of chronic disease worldwide may reach $47 trillion by 2030.
Second, biotech stocks benefit from a massive and burgeoning addressable market. Grand View Research states that the sector reached a valuation of $1.55 trillion last year. Between 2024 to 2030, the segment could expand at a compound annual growth rate of 13.96%. At the culmination point, the ecosystem could be worth $3.88 trillion.
Add in the lower cost and potentially higher ceiling of biotech stocks under $10 and you have an extremely enticing opportunity. Below are a few ideas to consider.
CASI Pharmaceuticals (CASI)
Based in Beijing, China, CASI Pharmaceuticals (NASDAQ:CASI) develops and commercializes therapeutics and pharmaceutical products. Primarily, the company brings to the table Evomela, an intravenous formulation used as a conditioning treatment before stem cell transplantation. It also serves as a palliative treatment for patients with multiple myeloma.
To be upfront, CASI stock is all over the map. Since the start of the year, shares lost about 9% of equity value. However, in the past 52 weeks, they’re up over 167%. In other words, speculators should gird themselves for a high-risk, high-reward opportunity. Financially, it doesn’t get a whole lot better, with the company incurring a loss per share of 57 cents in the past four quarters.
The kicker is that analysts were anticipating a loss of 34 cents. Therefore, the average “earnings” surprise came out to 355% below parity. Further, experts believe that fiscal 2024 will be rough, leading to an erosion of almost 42% in the top line to $19.79 million.
However, they also see sales recovering in fiscal 2025 to $46.48 million, up nearly 135%. So, that’s something to consider if you’re looking into biotech stocks under $10.
Kamada (KMDA)
Located in Israel, Kamada (NASDAQ:KMDA) falls under the drug manufacturing ecosystem. Primarily, Kamada manufactures and sells plasma-derived protein therapeutics. Among its commercial products are Kamrab/Kedrab for treating prophylaxis of rabies. It also offers Hepagam B for the prevention of hepatitis B recurrence among liver transplant patients.
Financially, Kamada is a much more attractive proposition. In the past year since the first quarter, the pharmaceutical firm posted an average earnings per share of 6 cents. This figure beat the collective consensus view of 4 cents, yielding an earnings surprise of 61.68%. Over the past 52 weeks, KMDA stock gained 20%. However, the price action has been choppy, so it’s something to consider before taking a position.
Priced at 2.27X trailing-year sales, Kamada is undervalued. The underlying drug manufacturing space features a price-to-sales ratio of 2.85X.
Even better, analysts are projecting fiscal 2024 sales to land at $159.6 million, up 12% from the prior year. Fiscal 2025 revenue may bump up to $176.23 million, making the valuation more attractive. Thus, KMDA ranks among the top biotech stocks under $10.
Valneva (VALN)
A specialty vaccine company, Valneva (NASDAQ:VALN) develops, manufactures and commercializes prophylactic vaccines for infectious diseases with unmet needs. Primarily, the company offers Ixiaro, a Vero cell culture-derived Japanese encephalitis vaccine. It also offers Dukoral, an oral vaccine for the prevention of diarrhea caused by Vibrio cholera.
To be quite blunt, VALN may be the riskiest idea among biotech stocks under $10. Since the start of the year, shares lost more than 29% of equity value. Financially, the company posted an average loss per share of 10 cents in the past year since Q1. The problem is that covering experts anticipated an EPS of 24 cents during the period.
If we’re being honest, VALN stock trades at a high sales multiple of 3.05X. In the past year, this metric was slightly more palatable at 2.41X. That said, patience could be a virtue.
For fiscal 2024, analysts believe that sales could rise to $187.21 million. If so, that would imply growth of 12.7% from the prior year. Also, fiscal 2025 revenue could hit $244.92 million, up 30.8%. That makes VALN one of the tempting biotech stocks under $10.
On the date of publication, Josh Enomoto did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.