What are the Top 5 Biotech Stocks to Buy in 2018?

A new report by RBC provides top biotech stock options for 2018. Since the presidential election, some of the political rhetoric over drug pricing has died down , and tax reform would lead companies to either an influx of overseas cash or lower tax rates, even if they don’t necessarily apply next year. Below are the top 5 picks.

1. Celgene

Quite often a top pick among investors and analysts, the company’s Revlimid rakes in the money for blood cancer and its cancer drug Abraxane is gaining momentum. RBC writes, "We think sentiment is at the bottom for Celgene, and as concerns about Revlimid intellectual property abate, revenues bounce back, they potentially do a deal, and the pipeline starts to come through, investors will return to the name for its best-in-class growth and underappreciated long-term earning sustainability. We see a great entry point here and view it as one of our preferred top large caps."

2. Alexion Pharmaceuticals

Alexion is a rare-disease company headquartered in Boston. It offers Soliris for patients with Myasthenia Gravis, paroxysmal nocturnal hemoglobinuria (PNH), and atypical hemolytic uremic syndrome, Strensiq for hypophosphatase (HPP), and Kanuma for lysosomal acid lipase deficiency.

RBC wrote, "We continue to like Alexion for Soliris’ expansion into MG with a broad label and ALXN 1210’s likelihood of success in its Phase III Paroxysmal Nocturnal Hemoglobinuria programs on the back of best-case pharmacokinetic and supportive efficacy data seen at ASH."

3. Sarepta Therapeutics

Best known for its Exondys 51 for Duchenne’s muscular dystrophy (DMD), the company has a strong pipeline in RNA-based therapies for rare, infectious and other diseases. RBC wrote, "In the mid-cap commercial space, we like Sarepta Therapeutics given the robust start to the U.S. Exondys 51 launch, as well as upcoming potential catalysts next year including FDA meeting for golodirsen in the first quarter, The Committee for Medicinal Products for Human Use opinion for Exondys 51 in the first half of 2018, and first data from the broader pipeline including gene therapy and Peptide phosphorodiamidate morpholino oligomers."

4. Agios Pharmaceuticals

Agios focuses on cancer and rare genetic diseases. On Dec. 11, the company presented dataat the American Society of Hematology Annual Meeting from two studies evaluating AG-120 (ivosidenib) in newly diagnosed patients with acute myeloid leukemia (AML) and an isocitrate dehydrogenase1 or IDH2 mutation.

RBC wrote, "We remain bullish on the company on our increased confidence in their IDH cancer mutations franchise and potential for the wholly owned ivosidenib to follow the same rapid approval pathway as Celgene and Agios Idhifa."

5. AnaptysBio

Based in San Diego, the company focuses on anti-inflammation drugs. It raised $75 million with its IPO in late January, selling five million shares at $15 each. Shares have grown more than 400 percent. Its pipeline include ANB020 and ANB019 to treat severe inflammatory disorders, such as severe adult asthma and severe adult peanut allergy.

RBC wrote, "We remain positive towards ANB020’s IL-33 mechanistic rationale for these large and attractive indications, and note potential for ANB020 to be first-in-class for chronic prophylaxis in adult peanut allergies and best-in-class in severe asthma via broad and differentiating efficacy regardless of eosinophil status."