While the term “technology” often brings to mind the broader digitalization movement, tech actually has the most potential in healthcare. Thanks to groundbreaking innovations, we now know much more about the human body and how various diseases work. So, in time, we will likely transition from preventative measures to more remedial solutions. That bolsters the big-picture argument for biotech stocks.
Of course, when the pandemic first struck, everything changed. Due to various mitigation protocols and lockdown measures, several biotechnology companies suffered. For instance, people’s inability to get treatments for chronic conditions due to overrun hospitals was bad news for those on the cutting edge of medical research.
At the same time, however, this global health crisis has also been a boon for some names. Obviously, companies like Pfizer (NYSE:PFE) and Moderna (NASDAQ:MRNA) have benefitted handsomely from their first-to-market Covid-19 vaccines. Moreover, on a broader level, the underlying industry has also proved that it wasn’t just about milking investor dollars for research initiatives on a road to nowhere. In late August 2021, the U.S. Food and Drug Administration (FDA) fully approved the first Covid-19 vaccine, Pfizer’s messenger-RNA-based approach.
When it comes down to it, breakthroughs can be massive catalysts for biotech stocks. Prior to Covid-19, shares of Moderna were trading in the low-double-digit range. Now, MRNA stock is trading for more than $450 per share. That’s a testament to the fact this sector can produce wild gains.
So, this space is incredibly promising. But before we continue, it’s important to realize this sector can also be extremely treacherous. When you’re in the speculative side of this segment — which is what we’re dealing with below — you’re often betting on hopes and dreams. Most times, those dreams don’t pan out. Please acknowledge this fact and gamble accordingly. It’s risky, but one of these speculative stocks might just turn out to be that one-in-a-million gem.
- Seqll (NASDAQ:SQL)
- Provention Bio (NASDAQ:PRVB)
- Atea Pharmaceuticals (NASDAQ:AVIR)
- Neurobo Pharmaceuticals (NASDAQ:NRBO)
- Invivo Therapeutics (NASDAQ:NVIV)
- Synthetic Biologics (NYSEAMERICAN:SYN)
- Histogen (NASDAQ:HSTO)
Biotech Stocks to Buy: Seqll (SQL)
One of the youngest names on this list of biotech stocks, Seqll launched its initial public offering (IPO) in late August of this year. Specializing in “single-molecule sequencing,” the company uses its proprietary technology to better understand how diseases work.
Although Seqll doesn’t have a direct link to the ongoing Covid-19 crisis, SQL stock has still picked up investor interest because of the pandemic. Stat proposed the following back in May:
“[The] perpetrators of the next pandemic will likely come from the coronavirus or influenza families. Other possible culprits include flaviviruses such as the West Nile virus, filoviruses such as the Ebola virus, and alphaviruses known to associate with a number of human encephalitis diseases.”
In other words, there’s still potential for another outbreak of another illness down the line. Moreover, as many medical experts have opined, Covid-19 has proved that luck is not a strategy when it comes to dealing with public health crises. So, by elucidating the inner functions of a disease, Seqll could potentially help medicine become more proactive.
That said, SQL stock has still been a disappointment in this sector so far. If you’re interested in this one, tread carefully.
Provention Bio (PRVB)
If you follow meme trades, you’ll have noticed that several of the names in that sphere include speculative biotech stocks. Of particular interest are innovative firms like Senseonics (NYSEAMERICAN:SENS), which specializes in continuous glucose monitoring (CGM) devices. Grand View Research estimates that that market could enjoy a double-digit compound annual growth rate from 2021 to 2028. So, it’s no wonder why SENS stock has attracted attention.
But what if there was a way to treat autoimmune diseases before they even require CGM devices or other cumbersome solutions and expensive procedures? That’s the narrative behind Provention Bio, one of the more aspirational names you’ll find in the market. The company’s flagship therapy is teplizumab, which is designed to treat Type 1 diabetes.
On the surface, this backdrop sounds incredibly compelling for PRVB stock. Admittedly, though, shares have been volatile following the FDA’s rejection of teplizumab. But does that mean the game over for Provention Bio?
Well, management doesn’t think so. The company believes that the FDA rejected its drug mainly due to manufacturing concerns and says that these can be addressed relatively easily. If that’s the case, PRVB stock could potentially make big waves in the biotech arena.
Biotech Stocks to Buy: Atea Pharmaceuticals (AVIR)
In some cases, betting on the continuation of the pandemic has been very lucrative — so long as you picked the right biotech stocks. If you didn’t, then circumstances haven’t exactly been pretty. For Atea Pharmaceuticals specifically, it really depends on when you acquired AVIR stock.
If you acquired this name at or near its IPO and sold during its peak, you’ve probably made off like a bandit. If not, though, it’s a rough picture. However, with shares having bled off significantly, there is an outside possibility that AVIR could deliver the goods.
Back when I wrote about biotech stocks with Covid-19-specific narratives, I cited an article from The New York Times. That article noted that Atea’s compound AT-527 “has already proven safe and effective as a treatment for hepatitis C, and early studies suggested it might also work against Covid-19.” It also pointed out the company’s promising testing partnership with Roche (OTCMKTS:RHHBY).
Because this pandemic is incredibly stubborn, there’s some reason to believe that AVIR stock could fly higher. However, just make sure to perform your due diligence on this one and only gamble with funds that you can afford to lose.
Neurobo Pharmaceuticals (NRBO)
Billed as a “clinical-stage biotechnology company focused on developing and commercializing multi-modal disease-modifying therapies for viral, neuropathic, and neurodegenerative diseases,” Neurobo Pharmaceuticals provided an exceptionally relevant research and development base for prospective investors prior to Covid-19. Following the pandemic, though, Neurobo refocused its resources to develop therapies for the ongoing global health crisis.
At present, this company has two programs targeting the novel coronavirus. Right now, its primary drug — ANA001, indicated for moderate-to-severe Covid-19 patients — is enrolled in Phase 2 clinical trials.
Ordinarily, I’m not the biggest fan of biotech firms making a sharp pivot to Covid-19, especially considering the many competitors piling into that arena. Nevertheless, there’s an outside shot that Neurobo could find some success here. Because of some strong anti-vaccine sentiments, this health crisis could last a lot longer. Beyond the delta variant, the lambda variant could also pose serious problems. One Reuters report indicates that lambda demonstrated “vaccine resistance” in the lab.
As bad as that is, it could also make treatment options incredibly viable. This bolsters the potential case for NRBO stock, albeit cynically.
Biotech Stocks to Buy: Invivo Therapeutics (NVIV)
For those that wish to break the risk-reward balance of their holdings of biotech stocks, you might want to check out Invivo Therapeutics. As a penny stock, Invivo is wildly risky — not only for its subterranean pricing but also because of its pricing dynamics. Around mid-February of this year, NVIV stock closed up at $1.78. Now, shares are down at 67 cents — some 62% lower.
For your sake, please don’t invest in NVIV stock any more than you can afford to lose. However, if that money that you can afford to lose is relatively sizable, there might be an opportunity here.
Invivo specializes in groundbreaking therapeutics in the hopes of “redefining the treatment of spinal cord injury.” The company features an investigational treatment called the Neuro-Spinal Scaffold, which aims to support “neural regeneration and cell growth.”
This sounds like science-fiction-level stuff here. However, the losses that you will incur if NVIV goes awry will definitely be fact. Nevertheless, if you want to reach millionaire-maker status, you may be able to do so with Invivo if the company delivers on its ultra-long odds.
Synthetic Biologics (SYN)
Another example among extremely high-risk, high-reward biotech stocks, Synthetic Biologics will attract speculators with its price point first and foremost. At just about a penny above 50 cents today, SYN stock has the law of small numbers on its side. Not only that, recent history has proven that a well-timed rumor could send shares flying.
In early November of last year, SYN stock was trading at around 30 cents. Fast forward to Feb. 8 of this year and SYN stock finished the session at a multi-year high of $1.17. Of course, currently this stock is back on the below-one-dollar menu. But that’s where social media could potentially come into the picture.
It’s an intriguing proposition. And, according to its website, Synthetic Biologics pioneers “microbiome science rooted in the gastrointestinal (GI) tract to advance innovative therapeutics.” The company definitely has potential. Importantly, it features two candidates — SYN-004 and SYN-020 — for addressing (among many indications) pathogenic overgrowth and celiac disease, respectively.
Like Invivo above, SYN stock has generally been charting a series of higher lows. That might just set up bullish action in the future.
Biotech Stocks to Buy: Histogen (HSTO)
Last up, I’m going to round out this list of high-potential and high-risk biotech stocks with Histogen. Based in California, this clinical stage therapeutics firm specializes in regenerative medicine that aims to “ignite the body’s natural process to repair and maintain healthy biological function.” Basically, the company is targeting indications like “hair growth, dermal rejuvenation, joint cartilage regeneration and spinal disk repair.”
According to The American Academy of Dermatology, as reported by The Washington Post, “30 million women in the United States suffer from hereditary hair loss, compared with 50 million men.” Those are alarming statistics — and amplify the case for HSTO stock. But that’s not all. Histogen’s joint cartilage repair research could have even more profound implications for the medical community.
Not surprisingly, HSTO is one of the most popular biotech stocks on various social media platforms. It must be noted again, though, that the market generally has a negative view on this sector. In part, that’s due to potentially tougher regulations under President Joe Biden and his administration.
So, don’t buy this name thinking it’s an easy play. It has potential, but it’s certainly not easy.
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On the date of publication, Josh Enomoto did not have (either directly or indirectly) any positions in any of the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
A former senior business analyst for Sony Electronics, Josh Enomoto has helped broker major contracts with Fortune Global 500 companies. Over the past several years, he has delivered unique, critical insights for the investment markets, as well as various other industries including legal, construction management, and healthcare.