Top Biotech Stocks Climb to Leadership; Pass Buy Points or Build Bases Separator Site title Separator Site title

Biotech stock leaders are growing within the IBD 50 elite list, with some buying outlets transitioning and others building foundations. Between them, Pharmaceutical products catalysts (CPRX), Harmony Biosciences (HRMY), genmab (GMAB) e Neurocrine biosciences (NBIX) all show bullish price patterns.




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Catalyst now holds the top spot in the IBD 50 and leads an industry group of over 800 companies. It mounted a high-volume handle cup base on Wednesday, clearing a buy point at 16.76, according to MarketSmith.com. Shares fell 0.5% on Friday but are still within their buy range.

This biotech stock was Monday’s IBD Stock of the Day. He is also a member of IBD Tech Leader and IBD 50 Growth Stock to Watch.

Profits for the Miami-based biotech hinge on firdapse, a treatment for Lambert-Eaton myasthenic syndrome, or LEMS. LEMS is a rare autoimmune condition that weakens muscle strength, which often occurs in lung cancer patients. This promising drug had sales of $57.2 million in the third quarter, marking a growth of more than 59%.

Even as sales are growing, Catalyst is looking to acquire a second or third product, either through an outright purchase or a licensing deal.

Bullishly, CPRX stock has a best possible composite score of 99, according to IBD Digital. This places the biotech stock in the top 1% of all stocks in terms of fundamental and technical measures. Its 12-month performance is also in the top 1% of all stocks, as measured by the Relative Strength Rating.

Harmony Biotech shares pass the buy point

IBD 50 component Harmony Biosciences exited a cup-and-handle basis on Nov. 1 after posting a profit of 95 cents a share, easily beating FactSet estimates by 18 cents. The stock cleared a buy point of 52.62 on Friday and extended above its 50-day line.

Harmony’s claim to fame is pitolisante, which it sees “as a portfolio in a product opportunity.”

Pitolisant is approved right now as Wakix, a treatment for narcolepsy, but Harmony is studying its effectiveness in idiopathic hypersomnia, another sleep disorder. The drug may also be useful in treating myotonic dystrophy, a disease of muscle weakness.

It is also testing several treatments for Prader-Willi syndrome, which causes a variety of behavioral and intellectual problems and can also lead to short stature.

The biotech stock ranks eighth in the IBD 50 and third in the Medical-Biomed/Biotech industry group. The group has been particularly strong this year, ranking 18th out of 197 industry groups.

Harmony shares also hold a perfect Composite Rating of 99 and a strong RS Rating of 97.

Genmab and Neurocrine build the foundation

Genmab is an IBD Tech Leader component, ranked 12th on the IBD 50 list. The biotech stock is forming a long cup base with a buy spot at 49.17.

The company develops antibody treatments for cancer and other diseases, partnering with biopharmaceutical giants, including AbbVie (ABBV), Johnson & Johnson (JNJ), Therapeutic horizon (HZNP) e Seagen (SGEN). The Denmark-based biotech is now expanding its drug suite to new solid tumors and blood cancers.

In the September quarter, earnings and sales increased to 53 cents a share and $551 million, respectively. Both measures easily exceeded forecasts.

GMAB stock has a composite score of 99 and a strong relative strength score of 96, nearly identical to Harmony and other biotech leaders. Its RS line is at a new high.

Last but not least, Neurocrine develops pharmaceutical products for the treatment of neurological, endocrine and psychiatric disorders. It reported gains on Nov. 1, narrowly missing earnings estimates while beating past sales estimates. The stock rose 1.9% on Friday.

Shares are consolidating near multi-year highs, extended since October’s breakout. Despite collapsing to the 50-day line last week, Neurocrine stock is now back above the 50-day line and has a tight three-week pattern that is on track for a fourth week.

Technically, it shows a buy point of 126.09, but investors may want to wait for less volatile price swings.

NBIX stock is ranked No. 7 in the group, with a composite score of 95 and an RS score of 95.

Follow Michael Molinski on Twitter @IMmolinski

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