Biotech Momentum Plays About to Breakout on Pullbacks: AVGO, AMGN, SGEN, HALO

The second half of the year threatens to present unique investment opportunities after an impressive rally in the first half. Investors are increasingly awaiting pullbacks that should present ideal entry levels after the strong move to the upside.

AVGO, AMGN, SGEN, and HALO are biotech momentum plays that should be on any investors’ watchlist looking to profit from pullbacks. The stocks have registered significant moves to the upside, awaiting pullbacks.

Broadcom Momentum Play Amid AI Boom

Investors should keep an eye on Broadcom Inc. (NASDAQ: AVGO) as a semiconductor play amid increased focus on companies likely to power the next digital and artificial intelligence revolution. The company has carved a niche in designing, developing, and supplying semiconductors that help power devices and other technologies. It is billed as a market leader in the development of complex and mixed-signal metal oxide semiconductor devices.

It’s also a powerhouse in the development of network chips. It’s fresh from unveiling second-generation wireless connectivity chipset solutions for Wi-Fi ecosystems. The new solutions will strengthen its footprint on Wi-Fi routers, residential gateways e and client devices.

In addition to network chips, AVGO is increasingly unlocking opportunities amid the growing demand for chips needed to enable artificial intelligence innovation and solutions. Consequently, it is one of the plays alongside Nvidia well poised to benefit from the AI boom as it develops chips essential for AI and other products, including computers, cars, smartphones and appliances.

The stock is already up by more than 50% for the year outperforming the S&P 500, which is up by about 15%. The impressive run comes on the chip giant delivering solid growth, strong margins and high dividend yield. Additionally, it proved to be a solid play for passive income, having grown its dividend payout at the back of a 20% five-year annualized growth rate.

Pullbacks have emerged as exciting using opportunities from where investors on the fence have joined the fray and helped push the stock higher. A strong semiconductor demand and the growth of artificial intelligence should continue to strengthen AVGO sentiments in the market.

Amgen Improving Sentiments on Robust Pipeline

Amgen, Inc. (NASDAQ: AMGN) is down by about 14% for the year underperforming the S&P 500, which is up by about 15%. However, over the past month, the Biotech stock has rallied by more than 5% affirming improving sentiments in the market and a buildup in buying pressure.

One of the factors offering support to the stock is the Food and Drug Administration approving AMGN’s supplemental biologics license application for Blinncyto for the treatment of CD19-positive cell precursor acute Leukemia.

Following the approval, Amgen can now use the novel treatment to treat patients experiencing first and second complete remission. Amgen has already affirmed plans to develop Blinncyto for additional indications.

The biotech company has been advancing its robust oncology and immunology pipeline as part of a plan to come up with new treatments to counter the competition threat on its legacy products. Even though current drugs, Prolia Repatha and Evenity, have been driving sales, they face stiff competition.

Amgen sentiments are increasingly improving in the market amid expectations of positive clinical trial results in the second half of the year. In addition, the drug maker boasts of a strong biosimilar portfolio that strengthens the pipeline.

Seagen an Acquisition Momentum Play with Robust Cancer Pipeline

Seagen Inc. (NASDAQ: SGEN), a biotechnology company specializing in developing and commercializing cancer therapies, was in fine form in 2023. The stock is already up by more than 40% for the year despite pulling back by about 11% from its 2023 highs. The wave of consolidation that has been taking place in recent weeks affirms why it should be on any watchlist as a potential breakout play.

The impressive run in the market came on Seagen emerging as a $43 billion acquisition target for Pfizer. The two have already agreed with all the paperwork submitted to the Federal Trade Commission and Department of Justice for review.

The proposed merger is expected to strengthen Pfizer’s pipeline of cancer drugs by gaining access to a class of antibody-drug conjugates designed to kill cancer cells. Seagen already has four approved cancer therapies that generated over $2 billion in sales last year.

Additionally, Seagen has made impressive strides in strengthening its cancer pipeline. It is fresh from delivering positive clinical trial results from phase 3 trials of ADCETRIS   in combination with chemotherapy in the treatments of Hodgkin Lymphoma. The trials showed that the novel treatment can be relied upon to cure patients with a first-line treatment that reduces the prospect of cancer returning.

In addition, Seagen delivered solid first-quarter results characterized by a 22% growth in revenue and net product sales. In the quarter, the company secured FDA   accelerated approval for PADCEB as a first-line treatment for patients with advanced or metastatic urothelial cancer.

A robust pipeline with positive clinical trial results and the acquisition news explain why the stock has been flying high. Additionally, it remains a solid play on pullbacks.

Halozyme Therapeutics Improving Fundamentals After FDA Approval

After a roller-coaster first half of the year that resulted in a 40% plus selloff, Halozyme Therapeutics, Inc. (NASDAQ: HALO) is one Biotech stock on the move. The stock is up by more than 20% over the past two months, showing signs of breaking out amid strong momentum to the upside.

The San Diego-based biopharmaceutical company focused on developing and commercializing oncology indications has made impressive strides in strengthening its pipeline. Argenx receiving FDA approval for VYGART Hytrulo injection for subcutaneous use for generalized myasthenia is one of the factors offering support for the stock.

The FDA approval was based on positive results from a Phase 3 ADAPTSC study that showed VYVGART Hytrulo has the potential to reduce anti-ACHR antibody levels in adult gMG patients. Consequently, it became the first FDA-approved subcutaneous injection for generalized myasthenia gravis gMG.

In addition to positive trial results, Halozyme delivered solid first-quarter results characterized by a 38% year-over-year revenue increase to $162.1 million. The increase was mostly driven by strong demand for J&J subcutaneous Darzalex and Roche’s Phesgo. Royalty revenue accounted for more than 60% of total revenues.

Halozyme expects revenue to range between $815 million and $845 million for the current year, indicating a 23-28 % year-over-year increase. The increase will mostly be driven by strong demand for Darzalex SC and Phesgo, using ENHANZE technology. The biotech company also expects strong returns from royalty and other products.