Best Biotech Stocks Right Now

Review and Analysis

Overview

Biotech companies fall under the healthcare stocks sector and their stocks are the stocks of companies that primarily engage in the development of new cures and treatments against diseases, viruses, and medical conditions in general. The type of disease a biotech firm is targeting to fight largely determines its stock value and subsequent growth potential. For example, a biotech firm working on a medicine for a very rare disease will probably be less valuable than a biotech firm working on breast cancer treatment, since this is a disease that affects millions of people across the globe every year.

Due to the fact that each new drug developed needs to undergo a rigorous scrutiny process and countless clinical trials, while it must be submitted and approved by the pertinent authorities, such as the FDA in the USA, before it is allowed to start selling, biotech companies are always running the risk of spending a lot effort, money and time on developing drugs that may never hit the shelves. On the other hand, as illustrated vividly in the case of the covid vaccines, a biotech may see its shares catapult in a matter of hours if it manages to get a treatment or vaccine approved when that particular remedy is mostly needed and demand for it is high.

By the end of the guide, you should know the following:

• If Biotech stocks is a good or a bad investment.
• How to buy Biotech stocks.
• Where to buy Biotech stocks.
• Which Biotech share is best to buy now?.
• Biotech stock price prediction: Where Will Biotech stock Be in the next few Years?

Best Biotech Stocks To Buy In September 2023? 5 Names To Know

Gilead Sciences, Inc.

Gilead Sciences is currently one of the top biotech companies globally, with its work focusing on the research, development and commercialization of pharmaceutical drugs, especially in areas where the need for such medical treatment has not been met yet. Its main areas of interest are respiratory diseases, liver diseases, oncology and HIV/AIDS. Prior to deciding if this is the right stock for you to add to your investment portfolio, here’s a quick overview of the main advantages and drawbacks of investing in this company.

BENEFITS

• Gilead Sciences gained a prime spot in the spotlight during the hype of the COVID pandemic, since its antiviral drug Remdesivir was found to be helpful in the treatment of severe cases of the Covid-19 virus.
• Huge future sales are expected once Gilead Sciences drug Filgotinib gains approval from the Food and Drug Administration (FDA). This drug, which is used for the during its late-stage trials.
• Gilead Sciences is comfortably retaining its position as the leading pharmaceutical company in the fight against HIV and AIDS.
• The company records a strong and health dividend yield growth, increasing its payout by almost 60% in the past 6 years and offering shareholders a current dividend yield of over 3.5%.
• The company’s strong commitment to research and development, with billion spent annually towards this end, ensure its positive future prospects.

DRAWBACKS

• Despite successes in other fields, Gilead Sciences has been experiencing marked declines in the sales of its drugs used for the treatment of Hepatitis C, whose performance has been dulled for a consecutive number of years.

EXTRA FEATURES

• Due to the good number of pharmaceutical products that are currently in the late-stage testing process and having good chances to gain final FDA approval, an investment in this particular bio stock can be said to be less risky, since there are big chances of substantial near future sales and profits.
• Testament to Gilead’s strong financial position and growth potential is the significant year-on-year increase it has achieved in its revenues.

BUYING ADVICE

In a nutshell, Gilead Sciences is a very promising bio tech stock, that is worth your close attention and perhaps a spot in your investment portfolio. The future outlook and prospects seem more than positive, due to the multiple drugs in the pipeline as well as the contribution of Gilead drugs in fighting the Covid-19 pandemic.

With a $86.451 billion market cap, Gilead seems well on an expansion course, rendering it a solid investment, while as of April 2020, the company’s current price per one share of stock stands at $68.93.

Vertex Pharmaceuticals

Vertex Pharmaceuticals is another top example of a leading biotechnology company, whose main focus is in the development of drugs for the treatment of cystic fibrosis. Find out its main benefits and downsides to discern whether this particular biotech stock is worth investing in.

BENEFITS

• The company is the owner of the cystic fibrosis treatment Trikafta, which has already shown tremendous potential and markedly differs from other drugs for being able to treat up to 90% of cystic fibrosis patients. Already approved twice by the FDA in 2012 and 2019, Trikafta carries huge promise and potential both for patients as well as for Vertex.
• The recent acquisition by Vertex of Semma Therapeutics, could prove a highly profitable move, since Semma has been working on a cure for Type 1 Diabetes, a health condition that affects millions of people globally.
• Vertex Pharmaceuticals is a big proponent of collaborations, which add confidence to its investors, as well as help the company to expand further. A prime example of such a collaboration, is Vertex’s synergy with CRISPR Therapeutics to develop CTX001, a treatment that has already shown promise for treating sickle cell disease and other rare blood disorders. Though testing on this drug is still at its early stages the growth potential is huge if it manages to get FDA approval.
• Vertex exhibits healthy earnings growth and this trend is set to continue as recent forecasts reveal expected earnings increase of 64%.

DRAWBACKS

• The main drawback of investing in Vertex shares is the fact that the company’s stock trade at over 30 times their expected earnings, meaning that currently this particular stock seems to be overvalued. As a general comment, the valuation of stocks is an important factor to consider and investors should prefer undervalued stocks as their prospects are better and higher.

EXTRA FEATURES

The most noteworthy feature of the Vertex stock is the company’s long and proven history of growth, which is reflected in the fact that over the previous 3-year period, its revenue has grown by more than 44%, while its earnings have risen by almost 379% over the same period. This is a strong indication that buying Vertex stock is a great choice for those seeking a long-term investment opportunity with good potential.

BUYING ADVICE

With a current stock price at $202.24, Vertex Pharmaceuticals is a promising biotech stock to invest in, with the company doing a good job in keeping its debt levels under control, while at the same time recording good levels of cash flow.

Axsome Therapeutics Inc

An interesting biotech company, which may well prove a very potentially lucrative investment option is Axsome Therapeutics. Axsome often falls under the radar of investors mainly because it mainly deals with less well-known diseases. As a pre-commercial stage company, it concentrates on finding new therapies for the management of disorders affecting the central nervous system, the currently available treatments for which are very limited. Let’s have a closer look at the main strongpoints and drawbacks of investing in this particular biotech stock.

BENEFITS

• Axsome has achieved impressive growth in recent times, spiraling from a market cap of less than $100 million in 2018 to a valuation of almost $4 billion by the end of 2019.
• Massive growth may well be expected for Axsome in the foreseeable, as the company already has in the pipeline several new promising drugs, which are at their late development stages and stand good chances of gaining FDA approval soon, including new treatments for patients suffering from migraines and narcolepsy.
• The rise in depression rates as a result of the pandemic is set to work to the benefit of Axsome, as the company’s anti-depressant, the AXS-05, has already had substantial success, while the company is set to keep working on treatments for depression.
• An investment in Axsome can be argued as being less risky than others due to the strong liquidity metrics of the company, featuring a Quick Ratio of 1.41 and an equally good Current Ratio.

DRAWBACKS

• The recent unpredictability displayed by Axsome Therapeutics’ biotech stock can be said to be its main drawback in the eyes of potential investors, however against the backdrop of the recent pandemic this is a trend which has affected the entire pharmaceutical industry to a greater or lesser extent.

EXTRA FEATURES

• The fact that more than half of the company’s shares are owned by reputable institutions, shows the credibility which the company enjoys within the investment community and adds more confidence to individual investors thinking to add it to their portfolio.
• Axsome Therapeutics has consistently enjoyed a positive rating with the huge majority of investment analysts arguing in favour of purchasing stock in this company.

BUYING ADVICE

There are clearly several good reasons for an investor to buy Axsome Therapeutics shares, and with the current stock price of around $53, now seems like a good time to move in, considering the strong outlook for this biotech company.

Bio-Reference Laboratories Inc.

BioReference Laboratories is part of the OPKO Health group, and it is essentially a clinical lab company, providing lab testing services which are used in the diagnosis, evaluation, and treatment of a large number of various diseases. Another interesting and promising stock to watch closely, here’s what you should know before investing in this company.

BENEFITS

• It has often hit the headlines for increases in its share prices, especially during its acquisition in 2015 by OPKO Health. This deal was worth almost $1,5 billion and it led the company’s shares to increase by more than 30%.
• BioReference Labs is the third largest full-service clinical lab in the USA with well over 250 different patient service centers. It is a growth-oriented company whose sales and marketing department alone numbers 400 employees, while it employs an extensive medical team of over 120 MD, PhD, and other professional scientists and clinicians.
• The COVID-19 pandemic brought added traction and exposure for the company, with its shares soaring after BioReference Laboratories started accepting specimens for testing COVID-19 from clinics and healthcare providers throughout the U.S.
• The OPKO Health shares soared after BioReference Labs came to an agreement to undertake the COVID-19 testing for all NFL teams.
• Amongst the company’s many strengths and merits are its strong revenue growth, which is reflected also in its earnings per share, as well as its well managed debt levels.

DRAWBACKS

• The main potential drawback to an investment in BioReference Labs pertains to the reputation of its parent, OPKO Health, which is long known for using its debt in ways that are potentially risky for the company and its investors.

EXTRA FEATURES

• According to experts and analysts OPKO stocks are stocks to hold on to, due to its strong market capitalization of $1.11 billion, with forecasts for further earnings improvement in the foreseeable.
• BioReference Labs is a company which effectively meets its short-term liquidity requirements, based on its Quick Ratio of 1.97.

BUYING ADVICE

This is a stock that is well worth a position on your radar, since the company scores metrics well above the industry averages, such as high gross profit and net profit margins.

BioReference Labs’ stock price is currently around $34, while all OPKO Health shares are considered as viable investments with its stock gaining over 60% over the past year alone.

Adverum Biotechnologies, Inc.

Currenly valued at over $1.4 billion, California-based Adverum Biotechnologies is another biotech stock that deserves your attention as it holds a great potential. Adverum is essentially a clinical stage gene therapy company, which focuses on the development of treatments for serious ocular and other rare diseases.

BENEFITS

• Adverum Biotechnologies has recently hit the headlines and gained much exposure because of developing a new drug for the treatment of wet macular degeneration, a serious disease of the eyes, which is currently the most important cause of blindness in patients over the age of 60. Having successfully completed the first phase of clinical trials for this new treatment, hopes and anticipation are high and so are the company’s prospects.
• Building on its work against wet macular degeneration, Adverum is also developing another possible therapy in the form of ADVM-022, a gene therapy which consists of an one-off intravitreal injection. Besides used for the treatment of wet macular, this injection is also treating diabetic macular edema, giving hope to millions of patients.

DRAWBACKS

• A potential drawback or even better a wager for the prospects of Adverum is the fact that its new ADVM-022 drug will come with a high price tag since it is an one-off injection. This raises doubts whether investors will be willing to bear the burden of funding such a long-term solution. This being said, the potential success of this particular treatment could place Adverum at the top of the potentially multi-billion market for anti-VEGF (Anti-vascular endothelial growth factor therapy) medicines.

EXTRA FEATURES

• New impetus is expected to be gained by the recent appointment of a new company vice president, who has a long experience in ophthalmology, besides his strong track record of proven leadership, sales management, and product marketing skills, all of which will surely be to the long-term benefit of Adverum and its investors.

BUYING ADVICE

With a strong growth rate and positive prospects ahead perhaps Adverum should be added to your investment portfolio before its price soars, or at least be placed on your watchlist of biotech stocks to closely monitor before you buy.

Where Can You Buy Biotech stocks

Biotech stocks are growing in exposure and popularity, while they are also growing in numbers, meaning that you can trade them through most online brokers in a fast and easy manner. Such online brokers that facilitate the trading of stocks in general and biotech stocks in particular, also allow you access to useful trading tools, such as stock screens and custom filters that improve your trading experience and enhance your chances for stock trading success.

To get started with biotech stock investments today explore the online brokers that start-business-online recommends:

There are several online sites and platforms where people from across the globe can buy Biotech at good exchange rates and with low or no transaction fees. To aid your quest we have comprised a list of some of the most popular Stock Trading platforms to buy Biotech sector's shares from and your strongly advised to consult this list before making your first purchase of or investment in Biotech industry.

Features to Look in Biotech stocks

To be able to effectively compare between different biotech stocks and choose the one that best suits and matches your own trading style and aims and in order to best determine which biotech stock rightly deserves a spot in your own investment portfolio, you should pay particular attention to the following features for each share:

• Earnings per share: A company’s earnings per share (EPS) is a metric through which its profitability is determined. To calculate the EPS you must divide the net income of the company by the total number of its outstanding shares. The more profitable a company is deemed to be, the more attractive it is for investors.
• Price-earnings ratio: The price-earnings ratio (P/E ratio), which is calculated through the division of a company’s current stock price by its EPS, reveals whether a stock is undervalued or overvalued. Therefore, the lower the P/E ratio of the stock, the better an investment it is, since it means that it is undervalued. Thus, look out for biotech stocks with a low price-earnings ratio.
• Medical innovation: To be able to effectively invest in and trade on biotech stocks, you must be up to date with medical innovation news and breakthroughs, including the results of clinical trials and any approvals of new drugs, treatments or vaccines by the FDA.

Future Outlook for Biotech stocks

Patience leads to Better Profits

An investment in biotech stocks is not a get rich quick solution by any account. On the contrary, biotech stock investments usually require you to adopt the buy and hold approach for long periods of time, since many new treatments and medicines take years to develop and eventually hit the shelves. However, if you have the patience to wait it out, an investment in a biotech stock makes a turn into gold overnight, while also help save some lives too!

Risks of Investing in Biotech stocks

It is very possible that all the companies featured above will be able to successfully complete the clinical trials and thus gain regulatory approval to start marketing and selling their innovative drugs and treatments. However, it is also very possible that any clinical trial can flop or even completely fail at any stage. This is an inherent risk that is always present when considering investing in any pharmaceutical or biotech company. Moreover, even if clinical trials go well, there is a guarantee that treatments will definitely move on and get approval from regulatory agencies, such as the FDA.

This inherent risk does not mean that such investments should be avoided, but simply that potential investors should be more careful and more meticulous with their research in each individual company, finding out exactly at which phase of its development each new drug is. The general rule is that drugs that are already in the later stages of their development are more promising, and thus an investment in their companies is less risky. Moreover, biotech companies with several drugs in the pipeline are safer investments than those with just one or a few experimental drugs, as it is unlikely that all of them will fail to get approved and reach the markets. Because of the nature of their work, most biotech companies take a long time to become profitable, as this only comes after they have successfully launched at least one or more of their innovative treatments and drugs.

Until they reach this stage, however, they must spend significant amounts in order to fund their research and development operations as well as their clinical studies and trials and many often face significant difficulty in finding the necessary funds, failing dismally if and when their new drugs under development fail to gain approval and reach the market. It is thus important for potential investors to check out the current financial position of a biotech company and ensure it is in good standing to adequately fund its efforts.

Moreover, aspiring biotech investors should also be aware that many such companies often resort to the issuing of new shares to cover their cash needs, thus diluting the value of their existing shares, while others may count on grants they receive from the government of other organizations. Dependence may also be created through partnerships with larger drugmakers and it is not a rare phenomenon for promising biotech companies to be acquired by other larger pharmaceutical giants.

Despite such risks, however, the stocks of the above-mentioned biotech companies and many others in this field are very likely to generate incredible long-term gains and profits, for those investors wise enough to buy a stock at the right time and patient enough to long on to it until it booms.

Tips on How to Invest in Biotech stocks and Make a Profit

There is no guarantee that you will make a profit when you invest in Biotech. However, to give yourself the best chance possible we have hand-picked the three most valuable such strategies, which you can find below:

• Tip 1: Set your own specific Financial Goals
• Tip 2: Dollar-Cost Average Your Biotech Investments
• Tip 3: Diversify Your Biotech Investment

Overall Conclusion – Final Thoughts

In this guide, the aim wasn’t only to answer simple questions like “how to buy stocks of the Biotech sector?” or “where to buy Biotech stocks?”. Instead, the goal was to equip you with the relevant knowledge and insight to be able to see and understand the bigger picture as well as make your Biotech stocks investment journey as successful and as profitable as possible!