As the Q2 earnings season wraps, let’s dig into this quarter’s best and worst performers in the immuno-oncology industry, including Natera (NASDAQ: NTRA) and its peers.
Over the next few years, immuno-oncology companies, which harness the immune system to fight illnesses such as cancer, faces strong tailwinds from advancements in precision medicine (including the use of AI to improve hit rates) and growing demand for treatments targeting rare diseases. However, headwinds such as rising scrutiny over drug pricing, regulatory unknowns, and competition from larger, more resourced pharmaceutical companies could weigh on growth.
The 4 immuno-oncology stocks we track reported an exceptional Q2. As a group, revenues beat analysts’ consensus estimates by 9.1%.
Luckily, immuno-oncology stocks have performed well with share prices up 24.1% on average since the latest earnings results.
Natera (NASDAQ: NTRA)
Founded in 2003 as Gene Security Network before rebranding in 2012, Natera (NASDAQ: NTRA) develops and commercializes genetic tests for prenatal screening, cancer detection, and organ transplant monitoring using its proprietary cell-free DNA technology.
Natera reported revenues of $546.6 million, up 32.2% year on year. This print exceeded analysts’ expectations by 14.7%. Overall, it was a very strong quarter for the company with an impressive beat of analysts’ revenue estimates and full-year revenue guidance exceeding analysts’ expectations.
“We delivered outstanding results in the second quarter, with record Signatera growth and continued strength across our women’s health and organ health product lines,” said Steve Chapman, chief executive officer of Natera.
Natera scored the biggest analyst estimates beat, fastest revenue growth, and highest full-year guidance raise of the whole group. Unsurprisingly, the stock is up 33.6% since reporting and currently trades at $189.01.
Best Q2: Regeneron (NASDAQ: REGN)
Founded by scientists who wanted to build a company where science could thrive, Regeneron Pharmaceuticals (NASDAQ: REGN) develops and commercializes medicines for serious diseases, with key products treating eye conditions, allergic diseases, cancer, and other disorders.
Regeneron reported revenues of $3.68 billion, up 3.6% year on year, outperforming analysts’ expectations by 11.3%. The business had an incredible quarter with a beat of analysts’ EPS and revenue estimates.
The market seems happy with the results as the stock is up 6.7% since reporting. It currently trades at $582.
Is now the time to buy Regeneron? Access our full analysis of the earnings results here, it’s free for active Edge members.
Incyte (NASDAQ: INCY)
Founded in 1991 and evolving from a genomics research firm to a commercial-stage drug developer, Incyte (NASDAQ: INCY) is a biopharmaceutical company that discovers, develops, and commercializes proprietary therapeutics for cancer and inflammatory diseases.
Incyte reported revenues of $1.22 billion, up 16.5% year on year, exceeding analysts’ expectations by 5.5%. It may have had the worst quarter among its peers, but its results were still good as it also locked in a solid beat of analysts’ revenue estimates and a beat of analysts’ EPS estimates.
Interestingly, the stock is up 23.2% since the results and currently trades at $86.47.
Read our full analysis of Incyte’s results here.
Exact Sciences (NASDAQ: EXAS)
With a mission to detect cancer earlier when it's more treatable, Exact Sciences (NASDAQ: EXAS) develops and markets cancer screening and diagnostic tests, including its flagship Cologuard stool-based colorectal cancer screening test.
Exact Sciences reported revenues of $811.1 million, up 16% year on year. This result surpassed analysts’ expectations by 4.9%. Overall, it was an exceptional quarter as it also put up a beat of analysts’ EPS estimates and a solid beat of analysts’ revenue estimates.
Exact Sciences had the weakest performance against analyst estimates and weakest full-year guidance update among its peers. The stock is up 32.8% since reporting and currently trades at $62.64.
Read our full, actionable report on Exact Sciences here, it’s free for active Edge members.
Market Update
As a result of the Fed’s rate hikes in 2022 and 2023, inflation has come down from frothy levels post-pandemic. The general rise in the price of goods and services is trending towards the Fed’s 2% goal as of late, which is good news. The higher rates that fought inflation also didn't slow economic activity enough to catalyze a recession. So far, soft landing. This, combined with recent rate cuts (half a percent in September 2024 and a quarter percent in November 2024) have led to strong stock market performance in 2024. The icing on the cake for 2024 returns was Donald Trump’s victory in the U.S. Presidential Election in early November, sending major indices to all-time highs in the week following the election. Still, debates around the health of the economy and the impact of potential tariffs and corporate tax cuts remain, leaving much uncertainty around 2025.
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