I’ve always been fascinated by biotechnology, and some of my biggest winners have come investing in biotech stocks. I really like the idea of owning companies that are changing the game with their innovative technologies that can improve or save a person’s life and make investors money along the way.
However, I’m not saying that you should invest in every biotech company that you come across. In fact, it’s just the opposite. Biotech stocks are notoriously volatile, especially smaller ones. One FDA decision can make or break some of those companies, so it’s important to follow the industry closely. That said, no amount of reform, regulation or red tape can permanently stifle the demand or innovation for breakthrough products that can help detect, treat and even cure some diseases, so it can be a very lucrative area to invest in.
The key to successfully investing in these biotechs is being able to sort the winners from the losers, which is something I just love doing. In fact, my research has recently put three hot biotechs on my radar that I’d like to share with you right now.
Regeneron (NASDAQ:REGN) is one of my favorite biotechs and it’s a great example of perseverance. The stock didn’t do much for the first several years, but it has soared over 1100% in the last three-and-a-half years! The company has made its mark manufacturing drugs for a few medical conditions – especially those that impact the aging baby boomer population. REGN has active research and development (R&D) programs in many disease areas, including ophthalmology, inflammation, cancer and hypercholesterolemia.
REGN’s blockbuster drug is called Eylea, and it is a breakthrough treatment to combat macular degeneration. This is an eye disease that results in a loss of vision in the center of the visual field, making it difficult (or even impossible) to read or see faces. However, the peripheral vision remains, allowing those inflicted to perform other activities of daily life. This is a slow, degenerative blindness that is the leading cause of blindness for people over the age of 65.
The stock has been doing phenomenally well lately, more than doubling in the past 12 months, so it is important to take the long-term approach, but I see more upside over time for this rising biotech star.
MEI Pharma (NASDAQ:MEIP) is a small, development-stage biotech developing cancer treatments, specifically novel drug therapies for cancer suppression. The company is currently focused on three lead drug candidates, each of which is in the midst of clinical trials. Continued positive results from these studies could make MEIP worth more than $200 million, or just about double its current market cap.
Because MEIP is still in the development stage, it does not bring in revenues or produce earnings. In cases like this, clinical trial results and progress in drug development are more important to the stock’s movement than its finances. Many in the industry and analysts covering oncology stocks believe that MEIP shows promise based on the results that have been released so far, and I am in full agreement. These promising results have rewarded investors with a nice 17% return in the stock so far this year, and I don’t see things slowing down any time soon.
Intercept Pharmaceuticals (NASDAQ:ICPT) focuses on the development and commercialization of treatments for chronic liver disease. Its most advanced programs are related to the development of modified bile acids that can regulate key aspects of liver functionality. Its leading product candidate, obeticholic acid (OCA), has been developed to treat primary biliary cirrhosis (PBC), which is a rare and chronic autoimmune liver disease that, if inadequately treated, may eventually lead to cirrhosis, liver failure and death.
There is a significant unmet need for an alternative PBC therapy, and ICPT believes OCA has the potential to fill this void with an easy-to-use and effective drug, and clinical trials are under way to demonstrate this. The game-changing aspect of OCA is that treating PBC is just one part of what appears to be a much bigger picture. There are many other potential applications for OCA, including possible use in treating a number of intestinal and kidney diseases, which is where the company’s future potential lies.
We are all getting older and want to live longer and healthier, and these three companies might just be the ticket in helping us do just that. And of course, it would be nice to make some extra money along the way by investing in these innovative companies making significant breakthroughs that will help us enjoy those extra years.
If you want to hear more on my three picks, as well as other companies I am keeping a close eye on, take a few minutes to watch the video below (please note: my segment starts at the 5 minute mark).