Stocks to buy

Artificial intelligence (AI) has become an invaluable tool for investors seeking opportunities in the stock market. Its ability to analyze large amounts of data and recognize patterns makes it an ally in identifying high-potential stocks. I asked ChatGPT which biotech stocks it recommends for investment in July and it provided the following three companies. Let’s talk about these three AI recommended biotech stocks:

Vertex (VRTX)

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One of the companies ChatGPT listed is Vertex Pharmaceuticals (NASDAQ:VRTX). This pharmaceutical company focuses on the development and commercialization of innovative therapies for serious diseases. Its primary focus lies in developing small molecule drugs that target specific genetic and molecular abnormalities underlying various medical conditions. Vertex has been recognized for its pioneering work in the field of cystic fibrosis (CF). It has developed multiple therapies that address the underlying cause of CF, rather than simply managing its symptoms.

In its Q1 report, Vertex reported adjusted earnings of $3.05 per share, beating analysts’ expectations of $3.00. The company’s revenue also saw a 13.2% increase from the same period last year to $2.37 billion, which slightly beat analysts’ projections of $2.34 billion.

Shares experienced an 8.1% increase in value during the quarter and have accumulated a year-to-date gain of 18.0%, suggesting a positive market response to the company’s performance. In addition, the company reported quarterly net income of $699.8 million, indicating a profitable quarter for Vertex.

Vertex recently announced results in its ongoing Phase 1/2 study of VX-880 for the treatment of type 1 diabetes. The results encouragingly showed that VX-880 was tolerated well by all type 1 diabetes patients.

Novo Nordisk (NVO)

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ChatGPT also mentioned Novo Nordisk (NYSE:NVO), a Danish pharmaceutical company specializing in the treatment of chronic diseases, especially diabetes and obesity. Its main objective is to improve the quality of life of people living with these conditions.

In its latest first quarter report, the company shared some highlights of its performance. Obesity care sales experienced 131% growth in Danish kroner, reaching DKK 7.8 billion (up 124% at constant exchange rates). This reflects significant growth in this business area.

In addition, the company expanded its share buyback program by DKK 2 billion to a total of DKK 30 billion. This move demonstrates the company’s confidence in the long-term value it holds.

Rybelsus, a diabetes treatment, sales increased by 111% (107% at constant exchange rates) to DKK 4,356 million. Inventory turnover at wholesalers in the United States had a positive impact on sales growth. However, this growth caused supply chain restrictions shortages.

These results demonstrate significant growth in Novo Nordisk’s sales, especially in the obesity care area. The company is taking steps to address the supply constraints and expand capacity in the future.

Genmab (GMAB)

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Finally, we have Genmab (NASDAQ:GMAB), a biotechnology company focused on using antibody therapies to treat cancer and other unmet medical needs.

In its Q1 report, the company experienced a substantial 35% revenue growth to DKK 2,854 million. In terms of financial performance, net sales of DARZALEX by Genmab’s Janssen Biotech, Inc. reached USD 2,264 million in the first three months of 2023, representing an increase of 22% compared to the same period in 2022.

This growth was mainly attributed to higher royalties earned through collaborations with Janssen and Novartis (NYSE:NVS), as well as increased reimbursement revenue from activities with BioNTech (NASDAQ:BNTX). The company’s operating expenses also increased by 51%, mainly due to the expansion of its product portfolio, preparation for the launch of Epcoritamab and the strengthening of its organizational capabilities.

AbbVie (NYSE:ABBV) and Genmab have announced top-line results from the follicular lymphoma (FL) cohort of the EPCORE NHL-1 Phase 1/2 clinical trial. The trial evaluated epcoritamab, an investigational bispecific T-cell antibody administered subcutaneously. The study included 128 adult patients with relapsed or refractory FL who had received multiple lines of systemic therapy. Of note, 70.3% of the patients were double refractory to an anti-CD20 monoclonal antibody and an alkylating agent. Epcoritamab is a collaborative effort between AbbVie and Genmab as part of their oncology collaboration.

As of this writing, Gabriel Osorio-Mazzilli did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Gabriel Osorio is a former Goldman Sachs and Citigroup employee. He possesses discipline in bottom-up value investing and volatility-based long/short equities trading.

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