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Pharmaceutical stocks are now at a disadvantage. Emphasizing this point is that the SPDR S&P Biotech ETF is the top barometer of pharmaceutical investor sentiment and has fallen 22.1% so far this year. 

However, the market's attitude towards the "hammer-holder" of pharmaceutical stocks can be said to have created some truly compelling buying opportunities for patient investors. The following is a brief overview of the eight pharmaceutical stocks (in alphabetical order) that have fallen too sharply this year, making them their top picks into 2022. 

Adaptimmune Therapeutics (ADAP -3.05%) is a cellular immunotherapy company whose value has fallen by 47.4% so far from its 52-week high in 2021. Despite its main product candidate, afami-cel, the biotech company’s share price has plummeted this year. Significant progress has been made in the submission of regulatory documents to the U.S. Food and Drug Administration (FDA) next year.

As a result, Adaptimmunes' stock price is less than 2 1/2 times the company's last declared cash position and is currently close to its 52-week low. With the establishment of multiple partnerships and recent regulatory filings, the stock should regain its vitality in 2022. 

The share price of German cancer immunotherapy company Affimed Therapeutics (AFMD -4.11%) has fallen 46.5% from the 52-week high set in the second quarter of 2021. Despite the company’s earlier announcement of outstanding results, this sharp decline occurred—earlier this year, the results of a phase trial of its innate cell cement AFM13 in patients with relapsed or refractory CD30-positive lymphoma .

Under normal market conditions, this apparent victory of the clinic may lead to a sustained rebound. In contrast, Affimed's stock valuation is only 1.2 times the peak sales forecast for the first potential sign of AFM13. Wall Street believes that the stock price of this biotech company may more than double in the next 12 months, so the valuation is very low. 

The share price of rare disease drug maker Amicus Therapeutics (FOLD -0.67%) has fallen more than 55% from its current 52-week high. The orphan drug expert was hit hard in February after announcing the results of a late-stage trial of his Pompe disease candidate AT-GAA. Since then, Amicus has decided to submit regulatory documents for the therapy in the European Union and the United States.

What's worth noting about this stock is that in the worst-case scenario, it is currently trading at approximately 5.4 times expected sales in 2024. This may sound like a high valuation, but it is the lowest in the coveted field of orphan drugs. In turn, once the negative sentiment surrounding biopharmaceuticals dissipates, Amicus stock should be one of the first stocks to rebound. 

Aurinia Pharmaceuticals (AUPH -9.50%) stock is currently down 42.1% from its 52-week high. After the autoimmune disease expert submitted a $250 million hybrid shelf sale to the US Securities and Exchange Commission, it has returned to an average level in recent weeks, and some investors see it as a sign that the acquisition is not under consideration. Due to this sharp correction, Aurinia's stock is currently trading at only about 2.4 times the 2025 sales forecast of its lupus nephritis drug Lupkynis. Whether it is acquired or not, Aurinia's stock can be said to be theft at these levels. 

Axsome Therapeutics (AXSM -5.68%) stock is currently trading at a 60% discount to its 52-week high. After the FDA notified the company that it was unable to complete the regulatory review of the experimental drug for the treatment of major depression AXS-05 due to flaws in its regulatory application, investors withdrew from the biotech stock. A few months later, the FDA has not yet made a final decision on AXS-05.

On the bright side, management believes that these deficiencies can be resolved in the current review cycle. If it is true, Axsome's stock price should rise sharply in 2022. After all, Wall Street has set the highest sales of AXS-05 for the treatment of major depression at up to $1.3 billion. 

The stock price of clinical-stage gene-based editing company Beam Therapeutics (BEAM -1.91%) has fallen 48% from its 52-week high in recent weeks. The good news is that Beam has not reported any major clinical or regulatory setbacks. On the contrary, investors seem to have abandoned this biotechnology mainly because of its sky-high valuation. Beam's current market value is $4.7 billion. For biotechnology with an unproven platform, this is definitely a handsome valuation, especially for biotechnology that has just entered human trials.

That being said, if Beam's new gene base editing platform is clinically successful, its stock may be a good deal. Data for its first clinical drug candidate, BEAM-101, should be available sometime in 2022. The company plans to test the therapy as a treatment for the rare blood disease sickle cell disease. 

BioCryst Pharmaceuticals (BCRX -1.29%), a medium-sized rare disease drug maker, has seen its share price drop 36% from its recent 52-week high. However, based on the strong sales growth of its hereditary angioedema drug Orladeyo, BioCryst's stock should be said to be moving in the opposite direction.

The biotech company’s stock trades at approximately three times Orladeyo’s peak sales expectations, well below three times the net present value of its entire pipeline and product portfolio. For a high-growth pharmaceutical stock, this is a very cheap valuation.  

BridgeBio Pharma's (BBIO 0.34%) stock is down 45.6% from its 52-week high at the time of writing. Due to competition concerns about its experimental amyloidosis drug Acoramidis, the company's stock price has steadily declined in the second half of 2021, and the drug is scheduled to generate data before the end of the year. Although industry insiders largely expect this late-stage data to be positive, some analysts do not believe that the drug can effectively compete with rival therapies. This is a potentially major problem. According to a recent report by Evaluate Vantage, Acoramidis is easily the most important value driver for BridgeBio, with an estimated net present value of up to 3.5 billion U.S. dollars.

If Acoramidis's trial exceeds expectations, BridgeBio's stock may soar. In fact, Wall Street’s current consensus price target suggests that the biotech company’s share price may more than double in the next 12 months.  

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