The Cream Of The Crop: 5 Biotechs That Outrank Most Stocks

Stocks

Summary:

Biotech stocks are rebounding in July, helped by delays in U.S. drug import tariffs and strong earnings reports. Here are five standout biotech stocks currently outranking

Biotech stocks are on the rise in July after President Donald Trump said he would give pharma companies "about a year, year and a half" before enacting up to 200% tariffs on drug imports.

Shares whipsawed in early April after Trump and his administration announced "major" tariffs would soon be coming for pharmaceuticals, then delayed country-specific reciprocal tariffs for 90 days for most trading partners, only to clarify the delay doesn't pertain to sectoral tariffs.

Though Trump said in July he would levy tariffs on drug imports "very soon," biopharma stocks climbed on the announcement. At least one analyst said the news is promising because it means tariffs won't come in the immediate future, if at all.

Now, companies are bracing for drug pricing reform that aims to align the prices of medicine in the U.S. with an international index. Critics say this could harm innovation in the U.S.

Investor's Business Daily's Medical-Biomed/Biotech industry group has fallen about 4% this year, as of midday trades on July 25. The 695-company industry group ranks No. 24 out of 197 groups Investor's Business Daily tracks. The Relative Strength Rating of 89 — a measure of 12-month performance against all other groups — has improved markedly from 57 just six months ago.

But it's key to watch specific measures when examining stocks. In terms of fundamental and technical metrics, some biotech stocks are showing strength. The best biotech stocks trading above 10 right now are:

Exelixis

CorMedix

Harmony Biosciences

Eton Pharmaceuticals

Atara Biotherapeutics

Exelixis Focuses On Cancer Drugs

Exelixis leads the list of top biotech stocks. The company has made a name for itself as a cancer treatment specialist. It sells Cabometyx, a treatment for several forms of kidney, liver and thyroid cancer. The company's Cometriq treats thyroid cancer.

On June 23, Exelixis stock surged 7.4% after the company unveiled promising results for its next-generation colon cancer treatment. Patients given a combination of its drug, zanzalintinib, and Roche's (RHHBY) Tecentriq showed a statistically significant improvement in overall survival compared to those given a Bayer (BAYRY) drug called Stivarga.

During the first quarter, Exelixis reported adjusted earnings of 62 cents per share and $555.4 million in sales. Both measures easily beat forecasts. The company also raised its full-year sales outlook by $100 million. Shares shot up nearly 21% on May 13, the day after Exelixis' report.

The company now expects $2.25 billion to $2.35 billion in sales for 2025. That includes $2.05 billion to $2.15 billion in sales of its products.

The biotech stock is now well above its 50-day and 200-day moving averages.

Exelixis stock has a perfect Composite Rating of 99 and a Relative Strength Rating of 92. The CR is a 1-99 score of a stock's fundamental and technical measures, pitted against all other stocks.

The biotech stock lands on IBD's Tech Leaders list.

Focusing On Kidney Disease Patients

CorMedix joined the list of top-rated biotech stocks for the first time in May.

The company's lead product, DefenCath, was approved in November 2023 and launched for patients in hospitals in July 2024. DefenCath is a combination of drugs called taurolidine and heparin to reduce the risk of catheter-related bloodstream infections in kidney failure patients receiving chronic dialysis through a central venous catheter.

Shares of CorMedix bounded to a four-year high on June 23 after the company inked a deal with a large dialysis customer to begin using DefenCath in its patients. The company will use DefenCath in at least 50% more patients than initially planned. But CorMedix stock dropped by double digits on June 27 after the company announced a public offering.

During the first quarter, CorMedix earned an adjusted 30 cents per share on $39.1 million in sales. Earnings reversed from a year-earlier loss of 25 cents and beat forecasts for a 26-cent gain. CorMedix didn't have any year-earlier sales. First-quarter sales topped calls for $36.9 million.

CorMedix stock is now below its 50-day line, but remains above its 200-day moving average. Shares have a strong RS Rating of 90, but a lower CR of 83.

Harmony's Pipeline In A Product

Biotech stock Harmony Biosciences is making a name for itself with a single product: pitolisant. The company sees the drug "as a portfolio in a product opportunity."

Today, pitolisant is approved as a narcolepsy treatment named Wakix. But Harmony is also investigating pitolisant in other conditions, including a genetic disorder known as Prader-Willi syndrome and a myotonic dystrophy, a muscle weakness disease.

Harmony is also testing another earlier-stage product for Prader-Willi syndrome. Prader-Willi causes a number of behavioral and intellectual problems. It can also lead to short stature.

In the first quarter, Harmony reported an adjusted 78 cents per share on $184.7 million in sales. Earnings grew 16.5%, while sales climbed 19.5%. Both measures topped analysts' forecasts.

The biotech stock has retaken its 50-day and 200-day moving averages. Shares have a strong CR of 96, but a lower RS Rating of 72. Harmony stock is consolidating with a buy point at 41.61.

Rare Disease Specialist In Focus

Eton Pharmaceuticals landed on the list of top biotech stocks in June and regained its spot in July.

The company sells eight products, targeting rare diseases. It also has five drugs in development for forms of diabetes, Wilson disease, a endocrinological condition and adrenal crisis. Wilson disease is a rare, inherited disease in which the body can't remove excess copper, leading to a toxic buildup.

During the first quarter, Eton earned an adjusted 7 cents per share and had $17.3 million in sales. This is the first year Eton is expected to report an annual profit. Analysts call for adjusted earnings of 48 cents a share on $76.9 million in sales.

The biotech stock is now sandwiched between its 50-day and 200-day lines. Shares have a strong RS Rating of 96. Eton stock also has a CR of 89.

Using The Immune System

Atara Biotherapeutics is working on treatments for cancer and autoimmune diseases.

The company is angling to use T cells, a key part of the immune system, to identify and fight cancer. But unlike CAR-T cancer treatments from Gilead Sciences (GILD) and Novartis (NVS), Atara is working on allogeneic drugs. This means the drug is developed user donor cells, instead of a patient's own cells.

Atara's most notable drug is called Ebvallo, a treatment for Epstein-Barr virus. Ebvallo isn't approved in the U.S., though it's available in Europe. The FDA placed clinical testing on hold due to manufacturing concerns at a third-party facility. Recently, the FDA lifted those clinical holds.

In the first quarter, Atara came in with $98.1 million in sales. The 258% year-over-year increase was tied primarily to the completion of specific performance obligations under an agreement with Pierre Fabre. Pierre Fabre manufactures all of Atara's products, as of March.

Atara stock is trading well above its key moving averages, with a CR of 90 and a strong RS Rating of 94.

Source: investors

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