Why Has this Biotech Stock Tripled in 2024?

This biotech stock is up 158.6% year-to-date, thanks to strong earnings, raised guidance, and AI integration, with Wall Street optimistic despite some fundamental shortcomings.

This biotech stock is up 158.6% year-to-date, driven by strong earnings, raised guidance, and the adoption of an AI platform to enhance productivity, earning favorable views from Wall Street despite trailing a major competitor in fundamentals.

Key Takeaways

• This biotech stock’s share price has more than tripled over the past 12 months.

• The company has posted impressive earnings results and raised guidance, alongside implementing an AI platform that could boost its productivity.

• Wall Street has a favorable view of the stock, despite it trailing a major competitor on stock fundamentals.

1. In the Blood

Adma Biologics [ADMA] is a biopharmaceutical company that specializes in blood plasma-derived treatments for infectious diseases for the immunocompromised. It is the only such company domiciled in the US.¹

It has three licensed products: ASCENIV, a treatment for Primary Humoral Immunodeficiency (PI), or Primary Immunodeficiency Disease; BIVIGAM, an intravenous treatment for PI; and Nabi-HB, a treatment for patients exposed to Hepatitis B.

Adma has yet to make a profit, but its share price has taken off in recent months, gaining 182.4% in the 12 months to August 2 and 158.6% year-to-date.

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The largest single-day jump during this period came on May 10, when the stock closed 27.1% above the previous session.²

On May 9, Adma released its Q1 2024 earnings report, which beat analyst expectations on both earnings and revenue and saw the company raise its guidance for the current and subsequent financial years.³

When a company experiences share price gains like those Adma has posted this year, it can be hard for investors to know whether there is potential for future growth, or if they have missed the boat.

To unpack this, it makes sense to take a close look at the biotechnology sector.

2. Biotech on the Rise

Biotechnology is a huge theme with strong growth prospects.

According to Grand View Research, the global biotechnology market was valued at $1.55trn in 2023 and is expected to grow at a CAGR of 13.96% to $3.88trn between 2024 and 2030.⁴

North America accounted for 41.37% of the market in 2023, due partly to the presence of extensive R&D activities and high healthcare spending in the region.

The rise in chronic diseases and the increasing adoption of personalized treatments for life-threatening disorders are also expected to positively impact the market’s growth in the region.

Within biotechnology, however, the plasma-derived therapies market is a relatively new subset.

According to Research and Markets, this segment is expected to be worth $44.12bn globally in 2024, and to grow to $58.26bn by 2028, implying a CAGR of 7.2% over that period.⁵

3. Adma’s Biotech Credentials

OPTO’s proprietary ‘Relevance Score’ aims to assess a public company’s alignment with a primary investment theme; it does not aim to measure the strength of the company or investment.

The overall score is based on four key criteria.