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How well a company is run has big implications to its profitability and stock performance. One way to measure this is by looking at the corporate governance policies of companies, such as their board composition and financial auditing.

Institutional Shareholder Services (ISS) gives ratings for four areas of corporate governance, on risks related to: the board, the audit committee, the compensation committee, and shareholder rights.

We ran a screen on stocks from the biotech industry for those that have strong corporate governance policies, with “low risk” ratings in at least three of the four areas covered by ISS.

Interactive Chart: Press Play to compare changes in analyst ratings over the last two years for the top six stocks mentioned below. Analyst ratings sourced from Zacks Investment Research.‬


We also created a price-weighted index of the stocks mentioned below, and monitored the performance of the list relative to the S&P 500 index over the last month. To access a complete analysis of this list's recent performance, click here.



Do you think these companies have strong corporate governance? Use this list as a starting-off point for your own analysis.

List sorted by market cap.

1. Amgen Inc. (AMGN): Develops, manufactures, and markets human therapeutics based on advances in cellular and molecular biology for grievous illnesses primarily in the United States, Europe, and Canada. Market cap of $49.81B. According to ISS, the company has "low concern" in all corporate governance categories. The stock has lost 2.09% over the last year.

2. Celgene Corporation (CELG):
Develops, and commercializes various therapies to treat cancer and immune-inflammatory related diseases. Market cap of $27.85B. According to ISS, the company has "low concern" in all corporate governance categories except in the Compensation Risk category. The stock has gained 5.8% over the last year.

3. Cephalon Inc. (CEPH): Engages in the discovery, development, and commercialization of products for central nervous system, inflammatory disease, pain, and oncology therapeutic areas. Market cap of $6.28B. According to ISS, the company has "low concern" in all corporate governance categories except in the Compensation Risk category. The stock has gained 29.56% over the last year.

4. Human Genome Sciences Inc. (HGSI):
Operates as a biopharmaceutical company. Market cap of $2.23B. According to ISS, the company has "low concern" in all corporate governance categories except in the Compensation Risk category. The stock is currently stuck in a downtrend, trading 9.49% below its SMA20, 21.07% below its SMA50, and 49.7% below its SMA200. It's been a rough couple of days for the stock, losing 17.77% over the last week.

5. Incyte Corporation (INCY):
Focuses on the discovery and development of proprietary small molecule drugs for hematologic and oncology indications, and inflammatory and autoimmune diseases. Market cap of $1.70B. According to ISS, the company has "low concern" in all corporate governance categories except in the Compensation Risk category. This is a risky stock that is significantly more volatile than the overall market (beta = 2.43). The stock is a short squeeze candidate, with a short float at 13.9% (equivalent to 11.05 days of average volume). It's been a rough couple of days for the stock, losing 6.44% over the last week.

6. Questcor Pharmaceuticals, Inc. (QCOR):
Provides prescription drugs for central nervous system and inflammatory disorders. Market cap of $1.64B. According to ISS, the company has "low concern" in all corporate governance categories except in the Compensation Risk category. After a solid performance over the last year, QCOR has pulled back during recent sessions. The stock has had a couple of great days, gaining 5.99% over the last week. The stock has performed poorly over the last month, losing 12.69%.

7. Charles River Laboratories International, Inc. (CRL):
Provides research models and laboratory animal support expertise to help its global partners advance their research and drug development efforts. Market cap of $1.44B. According to ISS, the company has "low concern" in all corporate governance categories except in the Compensation Risk category. The stock is currently stuck in a downtrend, trading 7.68% below its SMA20, 14.54% below its SMA50, and 24.86% below its SMA200. The stock has performed poorly over the last month, losing 15.11%.

8. Immunogen Inc. (IMGN):
Engages in the research and development of antibody-based anticancer therapeutics in the United States. Market cap of $770.67M. According to ISS, the company has "low concern" in all corporate governance categories except in the Compensation Risk category. The stock is a short squeeze candidate, with a short float at 7.45% (equivalent to 6.6 days of average volume). It's been a rough couple of days for the stock, losing 7.85% over the last week.

9. PDL BioPharma, Inc. (PDLI):
Engages in the management of antibody humanization patents and royalty assets, which consist of Queen et al. Market cap of $747.88M. According to ISS, the company has "low concern" in all corporate governance categories except in the Shareholder Rights Risk category. The stock is a short squeeze candidate, with a short float at 12.27% (equivalent to 7.38 days of average volume). It's been a rough couple of days for the stock, losing 8.55% over the last week.

10. AVEO Pharmaceuticals, Inc. (AVEO):
Engages in the discovery and development of cancer therapeutics. Market cap of $626.24M. According to ISS, the company has "low concern" in all corporate governance categories except in the Compensation Risk category. The stock is a short squeeze candidate, with a short float at 6.22% (equivalent to 7.93 days of average volume). It's been a rough couple of days for the stock, losing 10.25% over the last week.

11. NPS Pharmaceuticals, Inc. (NPSP):
Engages in the development specialty therapeutics for gastrointestinal and endocrine disorders. Market cap of $521.40M. According to ISS, the company has "low concern" in all corporate governance categories except in the Compensation Risk category. The stock is a short squeeze candidate, with a short float at 5.82% (equivalent to 5.95 days of average volume). It's been a rough couple of days for the stock, losing 7.06% over the last week.

12. Idenix Pharmaceuticals Inc. (IDIX): Engages in the discovery and development of drugs for the treatment of human viral and other infectious diseases in the United States and Europe. Market cap of $437.48M. According to ISS, the company has "low concern" in all corporate governance categories except in the Compensation Risk category. The stock is a short squeeze candidate, with a short float at 7.44% (equivalent to 7.24 days of average volume). It's been a rough couple of days for the stock, losing 17.27% over the last week.

13. Achillion Pharmaceuticals, Inc. (ACHN):
Engages in the discovery, development, and commercialization of treatments for infectious diseases. Market cap of $279.58M. According to ISS, the company has "low concern" in all corporate governance categories except in the Shareholder Rights Risk category. The stock is a short squeeze candidate, with a short float at 8.21% (equivalent to 8.37 days of average volume). It's been a rough couple of days for the stock, losing 13.39% over the last week.

14. Savient Pharmaceuticals, Inc. (SVNT):
Focuses on developing KRYSTEXXA, a biologic PEGylated uricase in the United States. Market cap of $265.61M. According to ISS, the company has "low concern" in all corporate governance categories except in the Compensation Risk category. This is a risky stock that is significantly more volatile than the overall market (beta = 2.25). The stock is a short squeeze candidate, with a short float at 34.3% (equivalent to 13.38 days of average volume). It's been a rough couple of days for the stock, losing 17.52% over the last week.

15. Chelsea Therapeutics International Ltd. (CHTP):
A development stage pharmaceutical company, focuses on the acquisition, development, and commercialization of pharmaceutical products for the treatment of various human diseases. Market cap of $219.52M. According to ISS, the company has "low concern" in all corporate governance categories except in the Compensation Risk category. The stock is a short squeeze candidate, with a short float at 9.83% (equivalent to 10.65 days of average volume). It's been a rough couple of days for the stock, losing 14.47% over the last week.

16. Progenics Pharmaceuticals Inc. (PGNX):
Engages in the development and commercialization of therapeutic products to treat the unmet medical needs of patients with debilitating conditions and life-threatening diseases in the United States and internationally. Market cap of $183.38M. According to ISS, the company has "low concern" in all corporate governance categories except in the Compensation Risk category. The stock is a short squeeze candidate, with a short float at 5.11% (equivalent to 14.47 days of average volume). It's been a rough couple of days for the stock, losing 8.57% over the last week.

17. Sangamo Biosciences Inc. (SGMO): Engages in the research, development, and commercialization of zinc finger DNA-binding proteins (ZFPs) for gene regulation and gene modification in the United States. Market cap of $159.48M. According to ISS, the company has "low concern" in all corporate governance categories except in the Compensation Risk category. The stock is a short squeeze candidate, with a short float at 16.78% (equivalent to 15.29 days of average volume). It's been a rough couple of days for the stock, losing 36.13% over the last week.

18. Cambrex Corporation. (CBM):
Provides products and services for the development and commercialization of new and generic therapeutics. Market cap of $134.50M. According to ISS, the company has "low concern" in all corporate governance categories. It's been a rough couple of days for the stock, losing 10.57% over the last week.

19. Repligen Corporation (RGEN):
Engages in the development and commercialization of therapies that deliver value to patients and clinicians in neurology, gastroenterology, and orphan diseases. Market cap of $95.82M. According to ISS, the company has "low concern" in all corporate governance categories except in the Audit Risk category. The stock has lost 7.16% over the last year.

20. Trimeris Inc. (TRMS):
Biotechnology Industry. Market cap of $56.45M. According to ISS, the company has "low concern" in all corporate governance categories except in the Compensation Risk category. The stock has had a couple of great days, gaining 10.04% over the last week.

*ISS ratings sourced from Yahoo! Finance, all other data sourced from Finviz.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Source: 20 Biotech Stocks With Strong Corporate Governance