Over the past decade, tech stocks led the way when it came to growth. The Covid-19 pandemic and the race for vaccines have helped to change that equation. Biotech stocks have been in the spotlight, with many posting phenomenal growth over the past year and a half.
More importantly for investors, that period of growth may have been triggered by the pandemic, but it’s not limited to the pandemic. Covid-19 and the ability to produce effective vaccines within months had the effect of putting biotechnology in the spotlight. Each of these biotech stocks has real potential to tackle other health-related issues, some of which have plagued us for centuries.
If you want to prime your portfolio for the next wave of long-term growth, these biotech stocks are all solid picks.
- Avid Bioservices Inc (NASDAQ:CDMO)
- BioCryst Pharmaceuticals (NASDAQ:BCRX)
- BioNano Genomics Inc (NASDAQ:BNGO)
- BioNTech (NASDAQ:BNTX)
- Moderna (NASDAQ:MRNA)
- Vistagen Therapeutics (NASDAQ:VTGN)
- 22nd Century Group (NYSEAMERICAN:XXII)
Biotech Stocks: Avid Bioservices (CDMO)
Avid Bioservices is a CDMO — a contract development and manufacturing company. The fact that Avid chose CMDO as its ticker reflects the fact that the company would like to be known as the CDMO for the biopharmaceutical industry.
What does Avid Bioservices do? As a CDMO, the company works with biopharmaceutical companies to help bring their products to market. This includes everything right up to large-scale commercialization and regulatory compliance. Avid operates 158,000 square feet of process development and commercial manufacturing space. Avid received its first FDA commercial approval in 2005; it’s an approved manufacturer for products marketed in over 90 countries and has produced over 150 commercial batches.
CDMOs like Avid Bioservices are a big part of the surge in biotech stocks. They offer the experience and facilities that smaller companies lack, enabling them to ramp up and start selling their products. They are also less risky because they aren’t betting everything on a single drug like many small cap biotech companies. CDMO stock really began to take off in 2020. In the past 12 months, it’s rewarded investors with a 295% return.
The Portfolio Grader rating for CDMO stock is an A.
BioCryst Pharmaceuticals (BCRX)
This North Carolina-based pharmaceutical company is probably best known as the developer of Peramivir, an FDA-approved anti-viral drug used in the treatment of influenza. The company is currently working on Galidesivir, which is a broad-spectrum anti-viral drug for use against serious illnesses including Yellow Fever and Zika. Galidesivir may also prove useful in treating Covid-19. In the first quarter, BioCryst launched Orladeyo, the first non-steroidal, oral treatment for hereditary angioedema.
One of the selling points of BioCryst is the company’s focus on building a “rare disease drug portfolio.” BioCryst is working to create oral drugs to treat rare diseases that don’t get a lot of attention from pharmaceutical giants, like Fibrodysplasia Ossificans Progressiva. The market for these drugs may be smaller, but there is also far less competition. Success can therefore be very lucrative.
Developing, manufacturing and marketing new drugs takes money, and that can sink a small-cap drug company. In its latest quarter, BioCryst said its current cash holding gives it enough runway for the Orladeyo launch period to carry the company into 2023. BRCX stock took a big hit two years ago when early trials of Orladeyo weren’t as compelling as hoped, but since then its been on a sustained growth path. Over the past 12 months, that’s amounted to gains of 272%.
At time of publication, BRCX stock has an A rating in Portfolio Grader.
BioNano Genomics (BNGO)
BioNano is a name that many investors recognize, even if they don’t follow biotech stocks all that closely. It’s been the subject of considerable drama over the past year.
In 2020, the company fell to penny stock status and risked de-listing. However, an announcement in December that it had been granted an extension by the Nasdaq saw BNGO stock start to rally. It became a meme stock. That activity hit a fevered pitch this January after a study was published where BioNano’s genetic testing was able to identify a known risk gene for Autism Spectrum Disorder (ASD). The potential in a test that could improve the outcome for ASD sufferers through early — and more specific — detection sent BNGO soaring.
Add in a flurry of announcements about the company’s Saphyr genetic testing system, which is proving successful in a wide range of applications including prenatal testing, cancer diagnosis and testing for Covid-19, and this was a recipe for a retail investor pile-on. By mid-February, BNGO had climbed 1,830% in under two months.
That couldn’t be sustained, of course, and BNGO stock faced a correction. However, shares stabilized and rallied over the past month. The fact of the matter is BioNano’s Saphyr genetic testing is much more than hype. Its potential is just beginning to be unlocked, putting BioNano in a strong long-term growth position.
BNGO stock currently earns an A rating in Portfolio Grader.
Germany’s BioNTech is one of my personal favorites among biotech stocks. The company has been around since 2008 — it’s no startup.
More importantly, BioNTech works with mRNA technology. It’s one half of a partnership that developed a highly effective mRNA vaccine for Covid-19 that’s in use in the U.S., Canada, Great Britain and other countries. The U.S. government just announced plans to buy an additional 500 million doses of that vaccine for global distribution by COVAX.
That news resulted in a pop for BNTX stock, even though it’s not selling those doses for a profit. However, one of the great things about a mature and proven biotech company like BioNTech is its long-term growth. BNTX stock didn’t just start moving in 2020 with the Covid-19 vaccine. It’s been on a growth path since it was first listed on the Nasdaq in the fall of 2019. I fully expect that to continue as the potential of mRNA technology continues prove itself.
You’ll find BNTX stock among those earning a coveted A rating in Portfolio Grader.
Moderna is another of those biotech stocks that everyone recognizes. Like BioNTech, this Massachusetts-based company works with mRNA technology. And, like BioNTech, it leveraged this expertise to develop a highly effective Covid-19 vaccine. That vaccine is Moderna’s only commercial product to date and has become synonymous with the company’s name: it’s the Moderna shot.
That vaccine has paid off in a big way for the company. In Q1 2020, Moderna reported $8 million in revenue. In Q1 2021, that was up to $1.9 billion. Additionally, the company has advanced purchase agreements in place for a total of $19.2 billion in sales for 2021. With those numbers, it’s little wonder MRNA stock is up 230% over the past 12 months.
And if you’re worried about what happens when the demand for Covid-19 vaccines begins to wane, don’t be. Moderna has two dozen other mRNA vaccine candidates in development for illnesses including influenza and HIV.
If you check Portfolio Grader, you’ll find MRNA stock currently holds an A rating.
VistaGen Therapeutics (VTGN)
VistaGen Therapeutics has a unique focus. The company develops treatments for central nervous system (CNS) disorders. This includes autism, ADHD, addiction and epilepsy. However, what’s kicked off recent interest in VTGN stock is a pandemic-related aspect of its CNS portfolio. Anxiety and depression are up, as people have been cut off from socializing with friends and family. And anxiety is expected to a big ongoing issue as remote workers return to crowded offices.
The company’s PH94B synthetic pherine nasal spray for anxiety is getting a lot of attention, offering a quick fix to reduce anxiety during high-stress activities like public speaking, with fewer side effects than other medications. Now entering Phase 3 trials, PH94B has helped VTGN stock to big gains. It’s up 2,560% over the past six months.
In May, Baird analyst Brian Skorney initiated coverage of VistaGen, seeing the stock as being on track to be a big performer next year on the strength of PH94B. His price target of $9 would offer investors an additional 224% upside over VTGN stock’s current level.
At the time of publication, VTGN stock has an A rating in Portfolio Grader.
22nd Century Group (XXII)
Finally, we come to 22nd Century Group. This company differs from the other biotech stocks I’ve outlined so far. It’s not searching for a vaccine, treatment or a cure. Instead, this plant-based biotechnology company describes its focus as being “tobacco harm reduction, reduced nicotine tobacco, and hemp/cannabis research.”
Those are big markets. 22nd Century Group estimates its market opportunity to be $1.3 trillion, with growth opportunities ramping up over the next several years. This includes strategic partnerships with leading cannabis companies — the latest of which triggered a 13% pop in XXII stock. Shares have now gained 104% so far in 2021.
The current Portfolio Grader rating for XXII stock is an A.
On the date of publication, Louis Navellier had a long position in BNTX. Louis Navellier did not have (either directly or indirectly) any other positions in the securities mentioned in this article.
The InvestorPlace Research Staff member primarily responsible for this article did not hold (either directly or indirectly) any positions in the securities mentioned in this article.
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