While biotech stocks saw a dip earlier this year due to market uncertainties, the sector is again gaining popularity as investors seek growth opportunities. With renewed optimism in the market, there is no better time to explore the potential of investing in biotech.
Despite being a relatively new industry, biotech has rapidly evolved into one of healthcare’s most innovative and important sectors. Stocks from the group have been known to produce 5x, 10x, or even 20x gains in a very short period. No doubt about it: it’s an exciting time to invest in biotech, and today we’re featuring three standouts offering a compelling narrative for investors. Although the sector can be volatile, careful analysis of the biotech industry can help investors find promising opportunities. So, let’s look at some of the most exciting and profitable biotech stocks to buy now.
CRISPR Therapeutics (CRSP)
CRISPR Therapeutics is a leading gene editing company on the brink of commercializing the first-ever CRISPR gene therapy this year. The treatment will act as a functional cure for sickle cell disease and beta-thalassemia, with a high probability of success. As such, the risk/reward scenario for the stock is attractive, considering the potential for a transformational year ahead.
On April 3, the company announced that it had completed the rolling biologics license applications (BLAs) to the Food and Drug Administration (FDA). The BLAs seek to gain approval for the investigational treatment of exagamglogene autotemcel to treat sickle cell disease and transfusion-dependent beta-thalassemia.
CRSP is up 2% year to date and has an average price target of $75 among the 31 analysts with coverage of the stock. That implies an upside of about 80%.
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TEVA Plarmeceutical Industries LTD (TEVA)
The global leader in generic drugs, Teva Pharmaceutical, is currently trading at an undeniably low 3x forward price-to-earnings multiple. One reason the stock is so cheaply priced right now is its high debt load of $20.7 billion as of the end of March. But that’s down from $21.2 billion as of the end of last year. And with the company projecting up to $2.1 billion in free cash flow for 2023, it could have room to pay down more debt this year.
Teva recently announced an agreement with Johnson & Johnson that will allow it to launch its Stelara biosimilar, AVT04, in the U.S. market by February 21, 2025, generating just under $10 billion in revenue for the healthcare giant last year. Stelara is a massive moneymaker for J&J and will provide consumers with a lower-priced alternative that could help accelerate Teva’s growth. The eight analysts offering 12-month price forecasts for Teva Pharmaceutical have a median target of $10.50, representing a 16% increase from the last price.
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Axsome Therapeutics (AXSM)
Axsome Therapeutics has two approved drugs on the market. Sunosi, a dopamine-norepinephrine reuptake inhibitor and the only one of its kind to treat narcolepsy, and Auvelity, a fast-acting oral treatment for depression, also the first of its kind. The latter launched in October and is being evaluated to treat agitation in people with Alzheimer’s disease and to help people quit smoking.
Other potential tailwinds include Axsome’s two other drugs — AXS-07 for treating migraines and AXS-14 for fibromyalgia — that it plans to submit for FDA approval this year. The share price is down 3% so far this year. The 14 analysts offering 12-month price forecasts for Axsome Therapeutics Inc have a median target of $108, representing a 62% increase from the current price.
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