2 Biopharma Stocks to Add to Your TFSA Today

Zymeworks Inc. (TSX:ZYME)(NYSE:ZYME) and HLS Therapeutics Inc. (TSX:HLS) offer the potential for huge growth over the next decade.

| More on:
Value for money

Image source: Getty Images

An August report from Grand View Research projected that the global biotechnology market would be worth $727 billion by 2025. Biotherapeutics have emerged as the fastest-growing sector in the pharmaceutical industry. Today we are going to look at two stocks in this sector that are worth your attention.

Zymeworks (TSX:ZYME)(NYSE:ZYME)

Zymeworks is a Vancouver-based clinical-stage biopharmaceutical company. It is focused primarily on cancer therapeutics and its leading product candidate, ZW25, is a bispecific antibody which is currently being evaluated in phase 1 trials. Shares of Zymeworks have climbed 49% year over year.

In early January I’d recommended Zymeworks as the perfect growth stock to stash in a TFSA with a long time horizon. The market research firm Mordor Intelligence released a 2018 report that put the cancer therapeutics market value at $136 billion last year. It estimates the market to be worth $220 billion by 2024, which represents a compound annual growth rate (CAGR) of 8.3%.

Zymeworks is set to release its fourth-quarter and full-year results for 2018 next week. In December the company submitted an investigational new drug (IND) application for ZW49, a biparatropic HER2-targeted ADC. January brought more excitement as Zymeworks reported a second IND in collaboration with Eli Lilly Company.

This second IND was on an Azymetric bispecific drug candidate. Both demonstrate that Zymeworks’ platform technologies are yielding consistent success.

The early data for ZW25 is very promising, and if it makes it to market its potential is enormous. Zymeworks stock currently boasts an RSI of 35, putting it just outside of oversold territory ahead of its Q4 earnings release. This stock has home run potential for growth investors.

HLS Therapeutics (TSX:HLS)

HLS Therapeutics is a Toronto-based specialty pharmaceutical company. Shares of HLS Therapeutics were up 8.2% in 2019 as of early afternoon trading on March 5. The stock has soared over 550% over the past year.

The company is expected to release its fourth-quarter results in late March or early April. HLS Therapeutics stock announced its graduation to the Toronto Stock Exchange (TSX) in early February. In the third quarter of 2018 the company established a quarterly dividend policy and declared a payment of $0.05 per share. This currently represents a modest 0.6% yield.

HLS Therapeutics announced a net loss of $19.7 million or $0.72 per share primarily due to one-time costs related to its debt refinancing. Most of HLS`s business is tied to Clozaril, a drug used to treat schizophrenia patients who are not responding to other forms of treatment.

In Q3 2018 the company won FDA rights to distribute Vascepa, a drug which has been shown to reduce cardiovascular events by 25% and death by 20%. It plans to commercialize the drug in Canada this year. HLS estimates that the drug could be worth up to $250 million in sales at peak value in Canada alone.

The stock is a solid value in comparison to the broader TSX index which has grown pricey in recent weeks. HLS is trading at the high-end of its 52-week range, but its potential for massive growth down the line should not be ignored.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Ambrose O'Callaghan has no position in any of the stocks mentioned.

More on Investing

edit Taxes CRA
Investing

Passive-Income Power: How to Make $100/Week TAX FREE!

Canadians hungry for more cash in an inflationary environment can churn out passive income with stocks like BTB REIT (TSX:BTB.UN).

Read more »

Growth from coins
Stocks for Beginners

3 Incredibly Cheap Canadian Growth Stocks to Buy Today

Canadian growth stocks are cheaper than they have been in a long time. Here are three stocks that are incredible…

Read more »

Stock analysts were once excited about construction company Aecon as an investment.
Coronavirus

Bull or Bear: Why Analysts Changed Their Tune on Aecon Stock

Analysts had been champing at the bit for the construction company, but the tides have turned.

Read more »

Specialty Brands faces higher raw materials costs.
Dividend Stocks

What’s Next for Premium Brands Stock?

Shares of the specialty food production and distribution company have fallen about 25% since last October.

Read more »

Double exposure of a businessman and stairs - Business Success Concept
Dividend Stocks

2 Interesting Buys in Any Market

Here are two intriguing buys in any market climate that offer defensive appeal as well as growth and income earning…

Read more »

Bank sign on traditional europe building facade
Bank Stocks

Should You Buy Bank Stocks Now?

Canadian bank stocks are getting cheap. Is this the right time to buy?

Read more »

stock data
Stocks for Beginners

2 Reliable Stocks Beginners Can Buy Amid the Market Selloff

As the broader market turmoil continues, new investors can buy these two reliable dividend stocks to get good returns on…

Read more »

Biotech stocks can be good yet risky investments.
Coronavirus

Is Bellus Health Stock Still a Buy After 30% Earnings Jump?

The biotech continues to make progress on obtaining FDA approval for its chronic-cough therapy.

Read more »