3 Biotech Stocks with Potential for Major Medical Breakthroughs in 2024

Industry Overview - The biotech sector has experienced a significant rally, with the SPDR S&P Biotech ETF (XBI) increasing by 31% in the last three months after being mostly down for the past three years [1] - Despite the rally, the monetary and regulatory environment remains challenging for biotech stocks [1] - Long-term investment is essential in biotech, as it can take years for drug candidates to receive FDA approval after entering clinical trials [1] Company Highlights Eli Lilly and Company (LLY) - Eli Lilly was one of the top-performing biotech stocks in 2023, with a rise of over 70% [3] - The anticipated approval of the obesity drug Zepbound in November 2023 is a key catalyst for the company's performance [3] - The company is also focused on donanemab, a clinical-stage drug for Alzheimer's disease, with an FDA decision expected in early 2024 [3][4] - LLY has a forward price-to-earnings (P/E) ratio of approximately 97x, indicating it is expensive relative to historical values, but is projected to have earnings growth of 91% in the next 12 months [4] Amylyx (AMLX) - Amylyx transitioned from a clinical-stage to a commercial-stage company after receiving FDA approval for Relyvrio, its treatment for ALS [6] - The company has reported three profitable quarters and anticipates a 79% increase in earnings over the next year [6] - Despite this, AMLX stock has decreased by 64% in the past year, potentially due to heavy short interest and concerns over slowing revenue growth [6] - Upcoming Phase 3 trial results from the PHOENIX clinical trial may provide additional data to support approval by the European Medicines Agency (EMA) [6] Agenus (AGEN) - Agenus is a clinical-stage company focused on developing cancer immunotherapies [7] - The company is working on a Biologics License Application (BLA) for accelerated approval of its lead candidate, botensilimab, targeting HER-positive metastatic colorectal cancer [7] - Although Agenus is a penny stock and not widely covered by analysts, four out of five analysts have rated it as a Strong Buy [8]