Tariff-Proof Your Portfolio With These Biotech Stocks

On Friday, I posted an article stating that the markets and corporate profits are just beginning to feel the full impact of new tariffs. It was good to see solid progress on the trade front over the past week or so. New arrangements with Indonesia, Japan and other nations provided some needed clarity for importers that source from those regions. 

A new agreement with Europe was also reached over the weekend. However, the fact is that the average tariff looks like it will be in the mid-teens around imports into the U.S. going forward. This is much, much higher than it has been in many generations.

Today I will highlight a couple of biotech/biopharma names in my portfolio that not only sport reasonable valuations but should experience little to no impact from these new tariff policies. Byrna Technologies BYRN, a maker of non-lethal ammo and weapons I detailed over the weekend, falls into this category as well.

I generally like the biopharma and biotech sectors as they among the few areas of the market where I am regularly finding bargains. Not surprising considering how much these sectors have vastly underperformed the overall market in recent years. 

The Trump administration also seems focused on building up the industry on American shores. Some potential governmental policies could be unhelpful on the margins, but the industry should continue to benefit from the continued aging populations across the western world.

Last week I added a few shares to my stake in ADMA Biologics ADMA via covered call orders as the stock is down some 25% from its previous highs three months ago. This mid-cap concern is being driven by a couple of its specialty plasma-derived biologic products. It derives these drugs from a network of 10 domestic plasma collection centers. ADMA completed this network buildout in late 2023 and ever since, a growing amount of its sales have dropped to its bottom line and the company has become solidly profitable. 

Current analyst projections see revenue growth at slightly better than a 20% CAGR over the next four fiscal years. Profits should expand faster than that in the years ahead. ADMA has good management, is making strides on the yield management front and has a solid balance sheet. Recent analyst firm price targets have been in the low-to-mid $30s. With the recent pullback, the stock trades in the high teens.

I've also added a bit to my holdings in Iovance Biotherapeutics IOVA, which until recently has been one of the biggest laggards in my portfolio. This commercial stage biotech firm is a much higher beta play than ADMA Biologics as it will be a couple of years before the company achieves profitability. 

Iovance is more a "sum of the parts" investment thesis for me. It helps that options against the equity are lucrative and liquid, making it a solid covered call trade.

Iovance’s primary asset is a therapy called Amtagvi. This is FDA-approved for advanced melanoma. Amtagvia is also in trials for other oncology indications, including NSCLC (Non-Small Cell Lung Cancer) and endometrial cancer. Amtagvi manufacturing and intellectual property are fully located in the U.S.

Management at Iovance has guided for revenues between $250 million and $300 million in 2025. At its midpoint, that would represent more than 65% growth over 2024. It should be noted this was a significant guidance cut, due in a large part to challenges growing production capacity, including some schedule maintenance in the first quarter. This should show significant improvements when second-quarter results are posted. 

Iovance ended Q1 with just over $350 million in cash and marketable securities on its balance sheet. It has a current market capitalization of just over $1 billion. Lastly, a potential rival, Replimmune REPL, imploded recently after the FDA soundly rejected its marketing application around its primary drug candidate also targeting advance melanoma.

At the time of publication, Jensen was long ADMA, BYRN and IOVA.