There are a lot of biotechnology shares listed on the UK stock market, from multi-billion pound giants all the way down to penny share tiddlers. But it can be a difficult sector to investigate as the technology can be tricky to evaluate.
Today I’m looking at five, from across the FTSE indexes, and thinking whether they’re among the best biotech stocks to buy today.
Most of these share prices have fallen, so maybe there are some top buys here:
| Company | Market cap | Share price | 12-month change |
| Oxford Nanopore | £2.63b | 320p | -46% |
| Indivior | £1.99b | 283p | +85% |
| Genus | £1.60b | 2,430p | -53% |
| Oxford BioMedica | £433m | 451p | -61% |
| Futura Medical | £89.6m | 31.2p | -32% |
Oxford Nanopore only floated in September 2021. After an initial climb, the shares have now fallen 48%. But it would still be very much a ‘jam tomorrow’ investment, as we have yet to see any profit.
The company develops nanopore DNA and RNA sequencing technology, which could provide big benefits especially for identifying and sequencing viruses. In this case, that big valuation is the biggest problem I see. This is one I’ll watch.
Profitable biotech share
Indivior is making good profits. And though its shares have climbed over 12 months, a forecast P/E multiple of 19 still looks attractive. It’s had legal problems in the US, where opioid addiction treatments are in most demand, which brings risk. But hopefully that’s behind it now.
I just don’t think the potential is covered by the share price. It looks good to me.
Animal genetics
Genus is in the animal genetics business, and its shares were soaring to give it a massive valuation. But a big slump from a peak in August 2021 puts this biotech stock on a forecast P/E of ‘only’ 38 now. Analysts are forecasting growing profits that could bring it down to 25 by 2024.
That date is still some way out, which brings its own risk. But I can’t help thinking we could be looking at a nice valuation to buy at today.
Biotech to biotech
Oxford Biomedica licenses its own drug development platform to other pharmaceuticals companies, with some major players signed up. To me it’s a bit like the National Grid of the biotech world — it gets its share of the cash whoever delivers the final goods. There’s a risk it could be surpassed by something better, but I see a defensive moat. Profits have been erratic though.
The price performance over 12 months looks terrible. But the fall comes after a bit of Covid overheating. Over five years we’re looking at an 85% gain. I see definite long-term potential here.
Human problems
Futura Medical makes an erectile dysfunction gel. But it doesn’t make any profit. At least, not yet. The product appears to be very effective, and is available without prescription. The share price has been up and down over the past five years, but I’m not going to make any jokes about that.
I suspect positive news could send the shares up again, and now could be a good time to buy. I’m still wary of the lack of profits, mind.
My pick of these five? It would be Oxford Biomedica.
