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Investing in biotechnology — manipulating biological systems and organisms to create latest products — could impact your future in additional ways than one.
While biotechnology isn’t a slam-dunk on the stock market as a result of aspects just like the high cost of research and development (R&D), you may still make the most of holding biotech stocks.
When deciding on biotech stocks to purchase, it’s clever to think about corporations with at the least one or two solid products already in the marketplace, together with promising treatments in development. The revenue potential is healthier with biotech stocks that may deliver each.
The worldwide biotechnology market was value $372.8 billion in 2021 and is projected to grow to $1,345 billion by 2030. That 15.5% compound annual growth rate over the subsequent eight years might bode well on your portfolio.
All stock prices are as of market close on November 23.
Best Biotech Stocks To Consider in 2022
The next are our picks for one of the best biotech stocks to observe:
| Biotech Stock | Ticker | TL;DR (Too Long; Didn’t Read) |
|---|---|---|
| Axsome Therapeutics | (AXSM) | Focused on CNS conditions (depression, Alzheimer’s, migraine); Newly approved drug for major depressive disorder |
| Biogen, Inc. | (BIIB) | Biogen is a neuroscience firm with a recently approved Alzheimer’s drug and others for MS |
| Catalyst Pharmaceuticals | (CPRX) | Makes a speciality of rare diseases; currently only one drug for LEMS |
| CRISPR Therapeutics | (CRSP) | Company using CRISPR gene editing technology to develop treatments for cancers, blood disorders, and other serious diseases |
| Genmab | (GMAB) | Cancer drug developer that partners with major biopharma firms like AbbVie and Johnson & Johnson |
| Neurocrine Biosciences | (NBIX) | Ingrezza is its movement disorder treatment and it has several promising drugs within the pipeline; good growth stock potential |
| Vertex Pharmaceuticals Inc. | (VRTX) | Leading treatment for CF, working on drugs for kidney and liver diseases and Duchenne Muscular dystrophy; recent partner with CRISPR (CRSP) to treat/prevent blood diseases with gene editing |
1. Axsome Therapeutics (AXSM)
- Current Price: $56.85
- 12-Month High: $71.98
- 12-Month Low: $20.63
- 1-12 months Goal: $100.57
- Market Capitalization: $2.461 billion
Axsome Therapeutics develops treatments focused on central nervous system (CNS) conditions. A few of its drugs treat depression, Alzheimer’s disease agitation, migraine, narcolepsy, and fibromyalgia.
In October 2022, Axsome announced its latest treatment for major depressive disorder, Auvelity, which was approved for prescription in the USA. (FDA approval was granted in August of 2022.) It’s the primary oral medication of its kind to treat major depressive disorder.
Analysts at Simply Wall Street project Axsome Therapeutics will grow faster than industry competitors. Third-quarter results for 2022 showed revenue increased by 17%, and analysts predict that 2023 will produce 628% sales growth in comparison with the past 12 months.
Nonetheless, it could be best for those who use caution. The analysts provided a wide selection of price targets ($35-$210), which could indicate that is AXSM‘s value is tough to project.
2. Biogen, Inc.(BIIB)
- Current Price: $304.91
- 12-Month High: $307.40
- 12-Month Low: $187.16
- 1-12 months Goal: $307.78
- Market Capitalization: $43.92 billion
Biogen Inc. is a neuroscience research company founded in 1978. It goals to develop treatments for among the most devastating neurological diseases like Alzheimer’s, multiple sclerosis (MS), ALS, and spinal muscular atrophy.
Aduhelm, Biogen’s promising latest Alzheimer’s treatment, has received FDA approval. Nonetheless, a snag is that Medicare only offers limited drug coverage.
Biogen also published promising Phase 2 trial results for Litifilimab, a lupus drug. Provided that Biogen also has several MS treatments in its portfolio, it may very well be a solid pick for its current medications and people within the pipeline.
3. Catalyst Pharmaceuticals (CPRX)
- Current Price: $17.13
- 12-Month High: $17.22
- 12-Month Low: $5.24
- 1-12 months Goal: $17.76
- Market Capitalization: $1.783 billion
Investor’s Business Day by day lists Catalyst Pharmaceuticals as a top biotech stock. The corporate’s mission is to develop latest therapies to enhance the standard of life for those with “rare and ultra-rare diseases.”
CPRX obtained FDA approval for its treatment for Lambert-Eaton myasthenic syndrome (LEMS) in 2018. Catalyst’s amifampridine is the one treatment approved by the FDA for adults with this rare disorder. The corporate collaborated with BioMarin Pharmaceuticals to develop this drug.
Prior to now 12 months, Catalyst’s earnings per share (EPS) went up 62%, from $0.40 to $0.65. Revenue can also be strong, so it could be a biotech stock to observe.
4. CRISPR Therapeutics (CRSP)
- Current Price: $55.49
- 12-Month High: $86.95
- 12-Month Low: $42.51
- 1-12 months Goal: $102.35
- Market Capitalization: $4.345 billion
This company will sound familiar for those who’ve read concerning the researchers who received the 2020 Nobel Prize for research on CRISPR’s gene technology. CRISPR Therapeutics focuses on gene-based treatments for serious illnesses like cancer, diabetes, and genetic blood disorders.
CRISPR Therapeutics is a somewhat dangerous stock pick, however the gene-editing technology it’s developing has the potential to alter quite a lot of lives. It conducts R&D of gene-based medicines that may cut DNA to disrupt or correct the genetic faults that cause disease.
The firm partners with one other company on this list, Vertex Pharmaceuticals, Bayer, Nkarta Therapeutics, and Capsida Biotherapeutics. Treatments for sickle-cell disease, diabetes, hemophilia, ALS, and a number of other cancers are within the pipeline.
5. Genmab (GMAB)
- Current Price: $41.84
- 12-Month High: $43.62
- 12-Month Low: $26.19
- 1-12 months Goal: $40.68
- Market Capitalization: $27.699 billion
Genmab is a Danish biotech company focused on cancer treatments. Its recent earnings report indicated a 60% increase year-over-year in revenue in comparison with the primary nine months of 2021.
Sales of the drug Darzalex, developed with Janssen Biotech, grew by 35% in 2022 in comparison with 2021. The corporate also improved its financial guidance from August 2022 based on strong Darzalex sales in addition to the good thing about the foreign exchange rate on royalties from U.S. sales.
Zacks Equity Research gave GMAB a “Buy” rating in November 2022, partly since it has been outperforming the medical sector, moving 0.1% on a year-to-date basis in comparison with -18.3% for the medical industry.
6. Neurocrine Biosciences (NBIX)
- Current Price: $119.25
- 12-Month High: $125.99
- 12-Month Low: $71.88
- 1-12 months Goal: $127.58
- Market Capitalization: $11.47 billion
Neurocrine Biosciences focuses on treatments for neurological, endocrine, and psychiatric disorders. NBIX has 4 FDA-approved therapies and others within the pipeline.
Ingrezza, Neurocrine’s treatment for adults with tardive dyskinesia, is considered one of its top products. Other drugs treat Parkinson’s disease, endometriosis, and uterine fibroids. Neurocrine Biosciences can also be working on drugs to treat symptoms of Huntington’s Disease and schizophrenia.
On the positive side, third-quarter leads to 2022 showed growth in sales and revenue in comparison with 2021. The corporate raised its Ingrezza net product sales guidance after $376 million in net product sales for Q3.
Zacks Equity Research noted three aspects making Neurcrine a superb growth stock pick: solid earnings growth, positive asset utilization ratio, and promising earnings estimate revisions.
7. Vertex Pharmaceuticals Inc. (VRTX)
- Current Price: $315.34
- 12-Month High: $323.61
- 12-Month Low: $182.66
- 1-12 months Goal: $324.62
- Market Capitalization: $80.971 billion
Vertex Pharmaceuticals (VRTX) conducts research to develop and test treatments for serious illnesses corresponding to cystic fibrosis, kidney and liver diseases, and Duchenne muscular dystrophy. The corporate can also be within the research and clinical trial phases of treatments for Beta thalassemia, sickle cell disease, and kind 1 diabetes.
Though past performance doesn’t necessarily indicate future results, third-quarter leads to 2022 revealed a product revenue increase of 18% over 2021. The recent report showed rising numbers for net income and money, money equivalents, and marketable securities.
Vertex Pharmaceuticals holds a substantial market share for cystic fibrosis (CF) treatments. Plus, it’s partnering with other firms, including Moderna and CRISPR Therapeutics, to develop potential CF treatments.
Other Ways To Invest In Biotech
If you happen to’re hoping to speculate within the biotechnology industry, know that you just don’t need to buy shares of individual stocks. It is likely to be less dangerous to place money right into a wide selection of biotech corporations through biotech ETFs, mutual funds, or a robo-advisor portfolio.
Some biotech ETFs you may put money into are the First Trust NYSE Arca Biotechnology Index Fund (FBT), the iShares Biotechnology ETF (IBB), and the Invesco Dynamic Biotechnology & Genome ETF (PBE).
Should You Put money into Biotech Stocks?
As with every stock, biotech stocks have advantages and disadvantages for investors.
pros
- Although stock values in biotech recently hit a low, they’ve began to rebound, and there’s still room to grow.
- Choosing corporations with a various portfolio of treatments or investing in biotech ETFs may help mitigate risk.
- Though it’s difficult to predict top-performing stocks, biotech stocks potentially offer high rewards in exchange for top risk.
cons
- Biotech is a somewhat dangerous healthcare investment as a result of the high research and development costs mandatory to develop latest drugs.
- Regulatory approval within the U.S. and abroad could be lengthy and difficult, and there’s no guarantee that a brand new treatment will gain approval.
The Bottom Line
If you happen to’ve settled on biotech stock investing as a part of your investment strategy, consult with your broker or place an order in your online brokerage account.
Although the biotech industry is poised for growth, it’s tough to find out which biotech stocks may bring one of the best returns. You’ll be able to lower your risk by selecting corporations that provide tried-and-true drugs and promising latest ones in clinical trial phases or by investing in biotech mutual funds or ETFs.
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