Over the past couple of years, biotech players working on coronavirus vaccines and treatments have taken center stage. And some still make great investment choices. But there also are many other treatment areas and companies in the biotech space that are worth investors' attention.
Right now, I'm thinking about two companies specializing in oncology. They've got products on the market and exciting pipelines. In fact, these players have what it takes to deliver growth today and over time. Let's take a look at these innovative under-the-radar biotech stocks to add to your portfolio this year.
1. Seagen
Seagen (SGEN) sells four drugs for indications including Hodgkin's lymphoma, urothelial cancer, and breast cancer. Three of these products posted double-digit growth in the first nine months of last year. Tivdak for cervical cancer won approval in September 2021 -- so the company couldn't report a year-over-year growth figure for the product.
But all of Seagen's products resulted in a 22% increase in nine-month sales to more than $1.2 billion. At the same time, Seagen is working to expand use of these products across many other types of cancer. And many of these programs are in phase 2 clinical trials or farther along.
For example, the company is studying breast cancer drug Tukysa in gastroesophageal cancer and in solid tumors -- both in phase 2. And most recently, regulators granted Tukysa, in combination with trastuzumab, accelerated approval for a type of metastatic colorectal cancer.
These opportunities to expand the indications of currently approved drugs, as well as Seagen's numerous other pipeline candidates, should boost growth in the years to come.
In Seagen's most recent earnings report, it increased its full-year total revenue forecast to the range of $1.82 billion to $1.865 billion. That represents an increase of at least 6% from the previous estimate.
Today, Seagen trades for about 13 times sales, down from more than 30 a couple of years ago. This looks cheap considering Seagen's revenue growth so far and the potential for more ahead.
2. Exelixis
Exelixis' (EXEL -0.65%) revenue has taken off in recent years thanks to its flagship molecule, cabozantinib. It halts the activity of tyrosine kinases -- to stop the growth of cancer cells.
This molecule is the basis for two products sold in the U.S. and another product Exelixis markets with Roche's Genentech. Cabozantinib products generated $1.4 billion for Exelixis in the U.S. last year. That's part of the company's $1.6 billion in total revenue. Exelixis predicts total revenue of as much as $1.875 billion this year.
Cabozantinib today treats kidney, liver, and thyroid cancers, but the molecule holds the potential to expand into many other cancer indications. Exelixis is studying it in dozens of trials from areas including gastrointestinal and gynecological cancers, melanoma, and head and neck cancer, just to name a few.
Exelixis also has an exciting early-stage pipeline, including small molecules and biologics. The company aims to launch additional phase 3 studies of zanzalintinib -- a next-generation tyrosine kinase inhibitor -- this year. And Exelixis expects to report data from three pivotal trials of cabozantinib this year, too. So it looks as if this earnings story is just getting started.
Exelixis is trading for less than 20 times forward earnings estimates. That's compared to almost 30 a year ago. Considering cabozantinib's growth so far -- and the possibility of expanding its use across cancer indications -- Exelixis' stock is a great under-the-radar buy for investors right now.
