The expanding demand for healthcare in the world and the rise of new biotech solutions to existing medical challenges mean huge opportunities for companies like Abiomed, Inc. (NASDAQ:ABMD), Edwards Lifesciences Corp (NYSE:EW) and China Biologic Products Inc (NASDAQ:CBPO).
Healthcare is undergoing rapid changes in the U.S. China’s expanding middle class is beginning to demand more and better health options. Furthermore, these trends are intersecting with new technologies that are finally coming out of the biotech labs (and FDA testing) and into the marketplace. This new age of biotech stocks is more than just new pills — it’s about devices and delivery systems as well as new approaches to old problems.
You could say these three companies are specifically hemo-biotechs.
Abiomed and Edwards Lifesciences are doing some amazing work focused on the heart and heart function, and China Biologic uses plasma to develop its biologics.
The other thing these three biotech stocks have in common is they’re all A-rated “strong buys.” These biotech stocks don’t have something to prove; they’re already proving it.
Let’s take a closer look at each of these biotech stocks to buy:
Abiomed, Inc. (NASDAQ:ABMD)
Abiomed, Inc. (NASDAQ:ABMD) is currently basking in the glow of FDA approval of its unique and innovative Impella, the world’s smallest heart pump. Abiomed’s Impella is already available in Europe.
The Impella is designed to give heart patients lacking blood flow from the right side of their hearts the pressure needed to compensate for right heart failure. Most of those patients currently require massive drug therapy or surgical procedures.
And insertion in minimally invasive; it’s designed to be inserted into the femoral artery in the leg and moved into position in the heart. This means significant cost savings for insurance companies compared to current treatment options.
And it’s good news for ABMD stock — it’s up 70% in the past three months. However, given the potential of this device and the attractiveness Impella has for the market from an insurers perspective, there is plenty of upside left.
What’s more, since ABMD is such a specific company, it is also becoming a prime takeover candidate by one of the bigger medical device or pharmaceutical players out there, like Johnson & Johnson (NYSE:JNJ).
Edwards Lifesciences Corp (NYSE:EW)
Edwards Lifesciences Corp (NYSE:EW) has been fiddling around with hearts — in a good way, of course — for almost 60 years.
Its founder, Lowell Edwards sought out to build the first artificial heart and within two years, had developed the first artificial mitral valve put into a patient.
These decades later, EW continues its pioneering work, specializing in heart valves and blood flow monitoring.
EW biggest growth area is non-surgical heart valve replacement. Again, by inserting the new valve through the vein to the heart it cuts out costly and risky open heart surgery.
What’s more, a study released last year at an American College of Cardiology gave a big boost to fixing a bad aortic valve without open-heart surgery. Survival rates were better one year later for people who had a new valve placed through a tube into an artery instead.
This has given a huge boost to companies that make these type of valves, Medtronic PLC (NYSE:MDT) and Edward Lifesciences in particular.
Edward Lifesciences’ non-surgical heart valve sales were up 45% in the last quarter, which raised guidance for 2015.
China Biologic Products Inc (NASDAQ:CBPO)
China Biologic Products Inc (NASDAQ:CBPO) is one of China’s largest plasma-based biopharmaceutical companies in China.
China Biologic Products’ core capabilities include plasma collection, research and development, production and commercialization of biopharmaceutical products, specifically human albumin, immunoglobulin (including IVIG, intramuscular immunoglobulin and hyperimmune products) and coagulation factor products.
Essentially, immunoglbulin therapies are antibody therapies and can be used to treat a wide variety of conditions. The key to CBPO is it’s a credible and respected Chinese biotech that is gaining traction in the Chinese market.
As we see time and again, the Chinese government tends to favor domestic companies in meeting the demands of Chinese consumers and companies. That gives CBPO a leg up in a 1.5 billion person marketplace, even with serious contenders like Novo Nordisk A/S (ADR) (NYSE:NVO) and Baxter International Inc. (NYSE:BAX).
CBPO stock is up over 100% in the past year as investors have confirmed its one of the best ways to play China’s growing — and maturing — biotech sector.
Recently however, China Biologic stock is picking up a lot of short positions, particularly before it announces earnings on Mar. 4. The shorts have increased the volatility of CBPO stock but shouldn’t have much of an effect in the intermediate or long term.
Look for any price weakness as an opportunity to buy China Biologic on the cheap.
Louis Navellier is a renowned growth investor. He is the editor of five investing newsletters: Blue Chip Growth, Emerging Growth, Ultimate Growth, Family Trust and Platinum Growth. His most popular service, Blue Chip Growth, has a track record of beating the market 3:1 over the last 14 years. He uses a combination of quantitative and fundamental analysis to identify market-beating stocks. Mr. Navellier has made his proven formula accessible to investors via his free, online stock rating tool, PortfolioGrader.com. Louis Navellier may hold some of the aforementioned securities in one or more of his newsletters.