Top Biotech Stocks to Watch: Key Takeaways
- Lyell Immunopharma bounces after tough September…
- Emergent BioSolutions pops after recent news…
- Silverback Therapeutics gets squeezed…
As we’ve seen this a lot lately, biotech stocks are capable of making some major moves. That’s why they’re so fun to track … Here are 5 watchlist-worthy picks (details below).
- Lyell Immunopharma, Inc. (NASDAQ: LYEL … read my analysis here)
- Bicycle Therapeutics plc (NASDAQ: BCYC … read my analysis here)
- Emergent BioSolutions Inc. (NYSE: EBS … read my analysis here)
- Iovance Biotherapeutics, Inc. (NASDAQ: IOVA … read my analysis here)
- Silverback Therapeutics, Inc. (NASDAQ: SBTX … read my analysis here)
Table of Contents
- 1 What Does a Biotech Company Do?
- 2 5 Biotech Stocks to Watch: October 6, 2021
- 2.1 Biotech Stocks to Watch #1: Lyell Immunopharma, Inc. (NASDAQ: LYEL)
- 2.2 Biotech Stocks to Watch #2: Bicycle Therapeutics plc (NASDAQ: BCYC)
- 2.3 Biotech Stocks to Watch #3: Emergent BioSolutions Inc. (NYSE: EBS)
- 2.4 Biotech Stocks to Watch #4: Iovance Biotherapeutics, Inc. (NASDAQ: IOVA)
- 2.5 Biotech Stocks to Watch #5: Silverback Therapeutics, Inc. (NASDAQ: SBTX)
- 3 See the Stocks I’m Watching
- 4 Conclusion
- 5 One Platform. One System. Every Tool
What Does a Biotech Company Do?
Before you trade biotech stocks, it’s smart to know what they do…
Biotech companies develop drugs, treatments, therapies, and vaccines for a range of health issues. Again, these stocks became more popular after vaccine development took the spotlight last year.
Biotech stocks have good days and bad days. Drugs and vaccines take a lot of time and money to develop. And all that time and money can go down the drain if the FDA doesn’t give a drug or therapy its stamp of approval.
Traders like these stocks because they can make big, volatile moves on news. That can mean more risk, so you must be ready for the action.
How Biotech Stocks Performed in 2020
Like any sector, it’s not wise to judge the performance of biotechs on how a handful of stocks did. Some biotech stocks were home runs and others were strikeouts.
We can use a few ETFs to help tell the story, though…
The SPDR S&P 500 ETF tracks the performance of the S&P 500 and gives us a decent baseline for comparison.
SPY returned 72% from the March 2020 lows and 15% for the full year.
The SPDR S&P Biotech ETF tracks the biotech sector. XBI outdid SPY, delivering a 122% bounceback from March lows. It returned 49% for the entire year.
Market-mirroring ETFs and indexes often win out, but 2020 proved that hot sectors can crush them. In 2020, biotech was one of those sectors.
5 Biotech Stocks to Watch: October 6, 2021
Let’s look at five biotech stocks to watch now.
First, a quick note … Some of these stocks are a bit higher priced. What’s a small-account trader to do?
- You can use the rule of 10. Move the decimal point in the price over to turn a $200 stock into a $20 stock. It can help you see the price action more like a lower-priced stock.
- Take the sympathy play route. Strong action in higher-priced stocks can power smaller stocks — just because they’re in the same sector.
Remember these tips as you do your research and build your watchlists. Biotech stocks tend to be volatile and strong catalysts can ignite this sector.
Biotech Stocks to Watch #1: Lyell Immunopharma, Inc. (NASDAQ: LYEL)
LYEL jumped 12.5% last week on no news. Always interesting when stocks do that…
LYEL develops T-cell therapies for solid tumors. This is a fairly new kind of treatment for attacking solid tumors. Many companies are racing to produce the best treatment.
The biotech world is hopeful that this form of therapy will pay off big time. And biotech traders are prone to fall in love with these stocks…
Maybe that’s why this jumped last week. We can usually attribute stock jumps with no news to the market thinking the stock’s oversold.
That would make sense … LYEL had a brutal September, dropping 63% in just a few weeks.
There’s still some stuff to work out with this one. It was rejected at resistance last week.
But biotech companies are pretty good about working press releases. Good news could help this thing power back to the $18 range.
Biotech Stocks to Watch #2: Bicycle Therapeutics plc (NASDAQ: BCYC)
Man … This is a chart that really intrigues me moving forward.
It’s not perfect. But it’s pushing 52-year highs, closed strong last week, and has news in the air.
And it makes bicycles! I’m kidding, of course.
The company announced it will present data from a Phase 1/2a trial on Thursday, October 7.
BCYC stock jumped about 13% on the news.
Trial data can lead to more gains or a sell-off. We’ll have to watch and see. But this stock is in an uptrend and looking juicy…
Bicycle Therapeutics also has four other treatments in the trial stage.
Biotech Stocks to Watch #3: Emergent BioSolutions Inc. (NYSE: EBS)
EBS popped about 10% last week on the report that it received a modification of its $399 million contract from the U.S. Department of Health and Human Services.
Emergent BioSolutions will provide additional doses of its anthrax vaccine.
EBS has been in a downtrend all year. It’s down 55% from its highs of the year…
And it’s too early to tell if this is a stock worth watching in the short term. I don’t think it’s worth trading until it pushes $65.
But it’s nice to see it actually has some life. So it’s worth keeping an eye on. But let it work its way back first before looking into a trade.
Emergent has four vaccines on the market to treat anthrax, cholera, smallpox, and typhoid.
Biotech Stocks to Watch #4: Iovance Biotherapeutics, Inc. (NASDAQ: IOVA)
IOVA jumped 7% to close last week on the announcement of a clinical data presentation in mid-November.
The company will present data from two of its Phase 2 trials and discuss other discoveries.
Iovance is another company focusing on T-cell therapy. It has a total of six ongoing Phase 2 trials focused on different kinds of cancers.
This is an interesting ‘buy the rumor, sell the news’ play … The stock’s pushing toward the top of its three-month trading range.
IOVA has been rejected around $27.50 twice since May. It’s an interesting watch if it enters that territory again.
It has been on an uptrend since the middle of August…
Biotech Stocks to Watch #5: Silverback Therapeutics, Inc. (NASDAQ: SBTX)
SBTX has been a real stinker since spring … But it did jump nearly 17% to close last week.
Will these shorts ever learn? The short squeeze setup can be so predictable for traders who are prepped and paying attention.
I review these setups with traders just like you on Pre-Market Prep almost every day … The shorts just keep getting trapped.
SBTX has been in a downtrend for months. It’s hard to imagine this thing being in play moving forward…
But never underestimate the squeeze.
See the Stocks I’m Watching
No matter what’s happening in the overall market, there are always stocks that slip through the cracks.
That’s why I try to cast a wide net and watch as many stocks to help YOU catch the action.
Every Sunday, I’ll send you a list of stocks I think are worth watching in the upcoming week.
And I’ll include a detailed analysis of each pick. I also may look back at recent picks to break down recent picks. That’s critical for learning and preparing for future trades.
In the biotech sector, the right catalyst can supercharge stock runs. That’s great news for prepared traders. But you have to know what to watch … like trial results or FDA approvals.
That’s why keeping an eye on the news is so important. With StocksToTrade and our Breaking News Chat add-on, we do our best to help make that easier for you … See how the latest news can change your trading day. Grab your 14-day trial of STT + BNC today for just $17!
And remember, this is a list of stocks to watch — not trade recommendations. Do your own research and make your plans.
Biotech stocks can come with a lot of fun momentum, but you must be ready for it. That all starts with your watchlist. Get crackin’!
How do you watch and trade biotech stocks? Let me know with a comment below!