You are here to look for the top biotech stocks, but before discussing the best biotech stocks, we need a brief idea about the biotech industry. The biotech industry deals with drugs and diagnostic technologies for the medication and treatment of diseases. The industry includes companies that make drugs using living organisms like bacteria and enzymes.
The use of living organisms separates the biotech industry from the pharmaceutical industry. Biotech companies typically go through four crucial steps to develop a drug. The four essential steps are drug identification, preclinical testing, clinical testing and finally, approval.
The biotech industry or overall healthcare sector is gaining the attention of investors because of the high relative stability and enormous growth potential, especially after the pandemic.
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What is the Biotechnological industry?
The biotechnological industry includes the companies that work towards the treatment of diseases through drugs derived from living organisms, unlike independent pharmaceutical companies that use chemicals to make drugs. The biotechnology industry sector is collectively known as biotech in the financial world.
The biotech industry requires high operating costs to produce unique drugs for autoimmune disorders and cell and gene therapies. The biotech companies conduct extensive research and development along with testing that involves a lot of time to complete. The biotech industry uses many sources to develop new products and drugs that can cure challenging diseases.
The future of the biotech industry is expected to be great in terms of healthcare systems, and this sector has the huge potential to develop the best treatment systems for patients with serious diseases. In addition, analysts say this industry has great potential for providing higher returns on investment. As a result, many mid to large-cap biotech companies are listed on popular exchanges of the world.
Investors see excessive opportunities in these companies with different specialisations of treatment and drug manufacturing for various diseases. When biotech companies get successful, they can produce highly profitable products. But you need to be aware of the associated risks because small biotech firms can be highly unpredictable. You can lose money rapidly due to the unstable connection between the stock price and the success rate.
To invest in the trend of the healthcare sector, here are our top picks from the basket of biotech stocks to buy.
Top Biotech stocks
- Aclaris Therapeutics Inc. (ACRS)
Pennsylvania based clinical-stage biopharmaceutical company Aclaris Therapeutics Inc. is one of the best-performing companies in the biotech sector. The company is working on drugs for immuno-inflammatory diseases. The current stock price of ACRS is $18.80, with a market cap of $1.15 billion.
The company aims to develop drugs to treat immuno-inflammatory diseases. The company’s product pipeline includes drugs for the treatment of several common diseases covering inflammatory bowel disease, atopic dermatitis and rheumatoid arthritis, etc.
- Novavax (NVAX)
Gaithersburg, Maryland based biotech company develops vaccines for severe infectious diseases. Before the Covid-19 pandemic, the company used to work on experimental vaccines for influenza, respiratory illness, Ebola and several emerging infectious diseases. The company has various subsidiaries, including Novavax AB, Cpl Biologicals Pvt. Ltd., Isconova AB and Fielding pharmaceutical company.
The current stock price of NVAX is $231.04, with a market cap of $17.2 billion.
NVX-CoV2373 is the name of a COVID-19 vaccine candidate being developed by Novavax. The company is exploring developing a COVID-19 vaccine that incorporates both NVX-CoV2373 and NanoFlu. Its vaccine candidate stimulates an immune response against the new coronavirus by using a single protein molecule known as a protein subunit.
Novavax also announced in 2020 that its late-stage testing of a new flu vaccine called NanoFlu had yielded positive results. In addition, the biotech company announced positive results from late-stage research of the experimental vaccination conducted in the United Kingdom in early 2021.
- iShares Biotechnology ETF (IBB)
iShares Biotechnology (IBB) is listed on Nasdaq. It is the largest biotech ETF with a total valuation of more than $11 billion and a high average trading volume of around 2.5 million shares. The ETF is offered at the current price of $167.51.
Despite having 270 positions, more than 18% of them are in three of the sector’s most famous stocks, such as Moderna Inc. (MRNA), Amgen Inc. (AMGN), and Gilead Sciences Inc. (GILD). Still, these are prominent biotech stocks that are at the top of many investors’ wish lists, so focusing on these more prominent and more known firms may not be too detrimental.
- VanEck Vectors Biotech ETF (BBH)
vanEck vectors Biotech is listed on Nasdaq. It is one of the crucial biotech ETFs of the industry. The VanEck Vectors has immense potential in biotechnology. The current stock price is $208.45, with an average trading volume of more than 15,000 shares.
vanEck is the exchange-traded fund under BBH that have $550 million in assets under management. In BBH, investors should be aware of the concentration of the holdings of other large ETFs. vanEck is a small fund but with less holding, it can prove to be a great investment.
- Vertex Pharmaceuticals (VRTX)
The Boston, Massachusetts based biotech company Vertex Pharmaceuticals works exclusively on rational drug design instead of combinational chemistry. The company is working on improving health by providing various essential services for patients. Leading researchers, public health experts, doctors jointly work on providing the cure for various diseases. The current stock price of VRTX is $183.41 with a market cap of $47.6 billion.
Vertex Pharmaceuticals, which manufactures a number of cystic fibrosis (CF) medications, has almost a monopoly on the marketing of treatments for the disease’s underlying cause. With phase 2 initiatives addressing pain and renal disorders caused by specific gene abnormalities, Vertex hopes to extend beyond CF therapies. Other prospective CF medicines in phase 2 testing are also in the company’s pipeline.
Vertex is also collaborating with CRISPR Therapeutics (CRSP) on an early-stage development programme to evaluate gene-editing medicines for the rare blood illnesses of beta-thalassemia and sickle cell disease. Vertex’s newest medicine, a combination of the two cystic fibrosis drugs Trikafta and Kaftrio, has the potential to increase the number of cystic fibrosis patients it can treat by more than half.
- Maravai LifeSciences Holdings Inc. (MRVI)
Maravai LifeSciences is a San Diego based biopharmaceutical firm working towards drug therapies, novel vaccines and curing human diseases through proprietary technologies. The company is a global leader in nucleic acid production and biologics safety testing to various cell and gene therapy companies. The current stock price of ACRS is $49.02 with a market cap of $5.6 billion.
Maravai has various subsidiaries covering Maravai Life Sciences Inc., Maravai Intermediate Holdings, LLC and Maravai Topco Holdings, LLC.
With the above subsidiaries, the company successfully developed drug therapies, diagnostics, medications and vaccines for the treatment of various diseases. The revenue of the company grew by 4 times in the second quarter while the net income increased by 35 times. The nucleic acid production drives the growth
- Agios Pharmaceuticals Inc. (AGIO)
Founded in 2008, Agios Pharmaceuticals is a Cambridge, Massachusetts based American biotech company that develops small-molecule anti-cancer therapeutics through cellular metabolism for genetically defined diseases. The current stock price of Agios is $48.24. It is one of the most valuable biotech stocks in the industry with a market cap of $2.8 billion.
Agios is a pharmaceutical business that develops medicines for diseases that are genetically specified, such as hemolytic anaemias and sickle cell disease. The business reported that the FDA (Food and drug administration) has accepted its New Drug Application (NDA) for mitapivat for the treatment of adults with pyruvate kinase deficiency which is lifelong hemolytic anaemia.
- Regeneron Pharmaceuticals (REGN)
Regeneron Pharmaceuticals is the Westchester County headquartered biotechnological company founded in 1988. The company is working on developing drug compounds with a full clinical development process and lifecycle management. The biotech company is greatly known for COVID-19 antibody therapy, called REGEN-COV.
Regeneron Pharmaceuticals is the only company that has the authorised Covid-19 antibody therapy for emergency use. Including this, there are various reasons for the strong growth potential of the stock. The current stock price of Regeneron Pharmaceuticals is $619 with a market cap of 66.21 billion. Several of Regeneron’s medical development efforts are aimed at obtaining approvals for new indications for medications that have previously been approved.
Eylea, an eye disease medicine developed by Regeneron in conjunction with Bayer, is the company’s most profitable product (BAYRY). Sanofi (SNY), another life sciences and pharmaceutical business, has a lucrative agreement with Regeneron.
Regeneron receives all net revenues from Eylea in the United States, and the business distributes revenue from markets outside of the United States with Bayer. The autoimmune illness treatments Dupixent and Kevzara, the cancer drugs Libtayo and Zaltrap, and the cholesterol drug Praluent are all marketed and sold by the two firms together.
Regeneron is also working on novel medication possibilities, such as the experimental gene-editing therapy NTLA-2001, which it is developing in collaboration with Intellia Therapeutics (NTLA).
- uniQure NV (QURE)
uniQure is the leading biotech company headquartered in Amsterdam, Netherlands. The company was founded in 1998, delivering curative gene therapies using an innovative technology platform. The current QURE stock price is $33.30, listed on Nasdaq with a market cap of $1.5 billion.
The company has various subsidiaries including Corlieve therapeutics SAS, Amsterdam Molecular Therapeutics and uniQure IP BV. The company creates one-time-only treatments for a number of genetic illnesses, such as haemophilia B and Huntington’s disease.
- CRISPR Therapeutics AG (CRSP)
CRISPR Therapeutics AG is a Swiss American biotech company based in Zug, Switzerland. The company is focused on the manufacturing of gene-based medicines. The current stock price of the CRSP is $117.6 with a market cap of $8.93 billion.
CRISPR is developing the CRISPR/Cas9 gene-editing platform to treat autoimmune diseases like cancer and hemoglobinopathies. The company has the vast potential to thrive in the biotech sector. CRISPR’s growth has been soaring because of its collaboration with Vertex Pharmaceuticals Inc. (VRTX) that we have discussed earlier.
In the second quarter, CRISPR generated massive revenue because of this partnership. Vertex paid $900 million upfront to CRISPR in at the end of the first quarter to develop a gene-based therapy called CTX001.
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Bottom Line
Biotechnology is one of the safest industries for inventors in terms of volatility and growth factor. The Healthcare sector is one of the most stable sectors where you can witness price fluctuation rarely. And some analysts say that the biotech industry has the guaranteed growth potential. But the only drawback of investing in biotech companies is that it is difficult to make a decent profit in short-term trading due to less volatility. Biotech stocks are best for long-term investing.
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