The biotechnology sector has seen better days. From the heady days of the pandemic when companies were racing to develop a vaccine against Covid-19, the industry is now enduring a hangover as both demand and sales decline. This means there’s more than a couple biotech stocks to sell. The iShares US Pharmaceuticals ETF (NYSEARCA:IHE) that tracks the industry is down 10% over the last 12 months and major players such as Pfizer (NYSE:PFE) have seen their share price decline 25% so far in 2023.
The downtrend continues, showing no signs of reversal. Investors should avoid the biotechnology sector for now. If already involved, it’s time to exit. Biotech and pharmaceutical makers face strong bearish sentiment. Here’s your guide to three biotech stocks. Sell them in June. Dodge the crash and burn.
Regeneron Pharmaceuticals (REGN)
What little gains Regeneron Pharmaceuticals (NASDAQ:REGN) had achieved this year were largely wiped out over the past month as the company’s share price fell 8%. The brand is now up only 2% on the year and trending lower.
The stock did well during the pandemic when its antibody treatment was used to treat Covid-19, including in former President Donald Trump when he caught the respiratory disease.
The U.S. government propped up Regeneron. It spent billions on the company’s Covid-19 antiviral treatment. But now, those sales have dwindled. The stock price is falling. Regeneron still sells a popular vision-loss treatment, “Eylea,” and an eczema medication, “Dupixent”. However, its pipeline for potential new products looks thin. The Covid-19 sales have virtually evaporated. This makes the company one of those biotech stocks to sell.
Another pandemic star whose fortunes have dimmed is Moderna (NASDAQ:MRNA). Year to date, Moderna is down 27%. The share price is now 70% lower than its all-time high of $450 reached in September 2021.
The stock skyrocketed during the pandemic as its Covid-19 vaccine was one of the first to be approved by the U.S. Food and Drug Administration (FDA). The company sold more than $18.4 billion of Covid-19 vaccines globally in 2022.
The company’s 2022 vaccine sales didn’t hit the projected $22 billion. The situation worsened with the Covid-19 vaccine sales forecast for 2023. It’s a mere $5 billion, a 73% drop from the previous year. This sent traders and investors scrambling to sell. MRNA stock went into a prolonged decline. Moderna’s other product line-up looks bleak. Its Covid-19 vaccine is the company’s only successful commercial product. This leaves investors questioning, “What’s next?”
The last, and arguably worst, biotech stock that investors should consider selling in June before it crashes and burns is Novavax (NASDAQ:NVAX). The reality is that NVAX stock has already crashed and burned, having declined 83% over the past 12 months and now in danger of falling into penny stock territory. Sadly, it doesn’t appear that the share price has yet reached a bottom. As with the other names on this list, Novavax’s troubles stem from its focus on developing a treatment for Covid-19.
When the pandemic hit, Novavax pivoted from developing treatments for infectious diseases to developing a Covid-19 vaccine. However, repeated delays and problems cost the company dearly as its Covid-19 vaccine did not receive FDA approval until late last year. By then, the pandemic was in its final innings and Novavax was left to sell its treatment as a booster shot in developed countries and focus on sales to emerging nations in Africa and Asia. The company most recently reported revenue of only $81 million and cut 25% of its workforce.
On the date of publication, Joel Baglole did not have (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.