With a major market comeback underway, CNBC's Jim Cramer zeroed in on four key stocks in a sector that's not getting much love: biotechnology.
"Last year it seemed like these stocks were mounting a comeback, but lately, they've once again been sent to the glue factory," the "Mad Money" host said on Thursday.
"Biogen's down 14 percent for the year, Celgene's down 21 percent, Regeneron's down 23 percent [and] Gilead [is] down nearly 9 percent," he continued.
While Cramer thought that most of the weakness was justified, he had to ask himself whether these stocks were getting too cheap to ignore.
But even if business was booming at the four "uniquely troubled" companies, their stocks would probably still be struggling to attract investors, he said.
"The economy's just too strong," Cramer argued. "When business is tepid, biotech is loved. When business is great, biotech is ignored — who wants consistent, steady-eddie growth when the industrials can produce huge, year-over-year earnings increases?"
Cramer started by unpacking the weakness at Biogen, a company focused on creating therapies for neurological and neuro-degenerative diseases.
In the last several years, Biogen shifted its focus from developing multiple sclerosis drugs to treating spinal muscular atrophy — a leading cause of infant deaths — and Alzheimer's.
"But in December we got some bad data on the Alzheimer's formulation, ... and while the spinal muscular atrophy drug has been selling very well, the problem is that it's kind of what we call frontloaded, as patients need to take fewer and fewer doses over time," Cramer said.
"In short, Biogen ain't what it used to be," he said. "But the stock has also gotten a heck of a lot cheaper."
A longtime leader of the biotech cohort, shares of Celgene were clobbered last October after the company discontinued clinical trials for a drug meant to treat Crohn's disease, then lowered its long-term earnings forecast.
"If anything, though, the stock has been punished on these developments," Cramer said. "Why? Because Celgene's last gigantic acquisition, the $7.2 billion purchase of Receptos in 2015, hasn't exactly gone too well. Receptos was all about one huge drug, but the FDA rejected that drug as a multiple sclerosis treatment in February. So people don't want to give Celgene the benefit of the doubt anymore."
Shares of Gilead have lost about half of their value since mid-2015, which Cramer attributed to Gilead being "the victim of its own success."
From 2012 to 2015, Gilead's Hepatitis C cure turbo-charged its stock, inspiring competitors like AbbVie and Merck to develop their own competing treatments.
"They've been undercutting Gilead on price. That's why the company's sales keep shrinking," Cramer explained.
In 2017, Gilead purchased Kite Pharma to move into the cancer immunotherapy space, but Cramer argued that it'll take a long time for the acquisition to pay off.
"It's going to take years before any of Kite's drugs could potentially hit the market," he said. "In the meantime, Gilead doesn't have much to offer you. That's why the company reported such a hideous quarter last week."
One of the first stocks that Cramer recommended on "Mad Money," Regeneron has declined dramatically from its 2015 highs of $557 a share, closing at $288.90 on Thursday.
"The run in Regeneron was all about Eylea. That was their revolutionary macular degeneration drug [that] still makes up 60 percent of the company's sales," Cramer said. "Now, Eylea's growth has slowed, but the big fear is potential competition from Novartis and Roche."
Regeneron has been trying to pivot, developing an anti-cholesterol drug, an eczema treatment and a skin cancer drug that's currently in clinical trials.
"Regeneron has a lot of shots on goal here," Cramer said.
While each biotech horseman is plagued with its own issues, Cramer maintained that all four stocks were "incredibly cheap."
"And you know what? Cheap matters," he said. "Yeah, the four horsemen of biotech aren't the growth powerhouses they used to be. But they're trading like the world is coming to an end and, at least in the case of Biogen and Regeneron, the numbers just aren't that bad."
And if any of these companies strike the right chord with the drugs in their pipeline, Cramer said there could still be growth to come.
"These big biotechs are hated because they've lost all of the characteristics of great growth stories. And that would bother me, except that they trade like value stocks," he said. "I think Biogen and Regeneron are worth checking out right now. Gilead and Celgene have made big, long-term bets on cancer immunotherapy, but it will be years before we know if those bets will pay off. I say no thank you, at least for the moment."