Personalized medicine stocks are hot right now. This form of medicine based on the particular genes, proteins, and other substances in a person’s body.
It promises to revolutionize healthcare making stocks in companies offering this form of medicine very intriguing.
The potential return on such shares is clearly high: Developing these treatments requires massive investments and resources, and patients requiring them are a captive audience.
Their costs are inevitably very steep, making potential revenues for this therapeutics very high indeed. This is the cutting edge of biotech also. Investors should understand that risk tolerance is necessary.
Success is not promised here. In order to maximize returns one needs to bet early on before numerous milestones on the path to FDA approval are passed.
Oric Pharmaceuticals (ORIC)
Oric Pharmaceuticals (NASDAQ:ORIC) is a company and stock specializing in precision oncology. That’s a fairly broad field given that there are so many forms of cancer and methods of treatment.
The company specializes in treatments to address therapeutic resistance. In other words, finding ways to bring improved efficacy to standard treatments when they don’t work for individuals.
That implies that Oric Pharmaceuticals’ therapeutics offer something novel in terms of mechanism.
As an example, the firm’s ORIC-114 drug boasts a particularly strong brain penetrant which promises to deliver therapies more thoroughly throughout the tissue.
The company remains in the pre-revenue stages and posted a net loss approaching $90 million in 2022. That followed a 2021 in which the company lost nearly $80 million.
However, the company maintained $228.2 million of funding to end 2022. That should fund the company into the first half of 2025. It also sold $25 million of shares to Pfizer at $4.65 which suggests a reasonable price floor expectation for shares on the part of Pfizer.
Avalo Therapeutics (AVTX)
Many biotech stocks including Avalo Therapeutics (NASDAQ:AVTX) focus on improving our innate ability to fight diseases. In certain cases, patients’ immune systems become weakened or signaled to dysregulate. That is true in autoimmune disorders and inflammation, which both drive disease and progression.
Avalo Therapeutics has developed what it refers to as the LIGHT-signaling network. It’s an acronym that represents 5 mechanisms that result in inflammation due to dysregulated immune function.
Avalo Therapeutics is developing treatments targeting Crohn’s disease and immunoregulatory disorders among others.
The company believes that if inflammation in barrier organs – the lungs, gut, and skin – can be reduced, then the effects of inflammatory diseases can be moderated.
Avalo Therapeutics saw its revenues more than triple in 2022, reaching $18.05 million, mostly from licensing revenue. Its losses more than halved in 2022, falling to $41.65 million.
The company will need to raise cash through equity sales this year or find new licensing avenues as it reported $13.17 million in cash to end 2022.
Twist Bioscience (TWST)
Twist Bioscience (NASDAQ:TWST) is a strong stock choice for investors seeking an established biotech firm. Unlike so many other biotech firms, Twist Bioscience isn’t about a pre-revenue promise of future upside.
Instead, Twist Bioscience is an established firm with a strong, flourishing income stream. The San Francisco-based firm reported $203.6 million in sales in 2022, up 53.83% year-over-year.
The positive news is that the company is expected to report roughly $264 million in sales in 2023 and $354 million the following year.
That said, the company still produces losses with a $41.8 million loss in Q1 of fiscal year 2023 but is balanced in terms of revenue generation. The company expects at least $104 million in synthetic bio sales this year, $120 million in gene sequencing sales, and $37 million in biopharma sales.
The company’s semiconductor-based synthetic DNA manufacturing process allows greater DNA synthesis for sequencing making it interesting into the future.
Exact Sciences (EXAS)
Exact Sciences (NASDAQ:EXAS) really fits the description of precision medicine because it is based on the substances in a person’s body. The company offers a group of tests that promise to help identify various forms of cancer earlier.
It might not conform to a popular idea that precision medicine is ultra-high tech, cutting edge science but it it’s important nonetheless. Anything that leads to earlier detection is inherently valuable.
Exact Sciences currently offers 7 cancer screening tests including the well-known Cologuard brand screening.
Investing in Exact Sciences is a question of how overall investor sentiment will shift relating to the firm. Exact Sciences has strong sales with $2.084 billion in revenues in 2022, but, as with so many biotechs, massive developmental expenses mean it still produces losses.
The company expects to produce positive EBITDA numbers this year on roughly $2.3 billion in sales. If that sways investors, EXAS stock should rise. If investors instead focus on losses, EXAS shares might falter as the company should continue to report losses in 2023.
Tenaya Therapeutics (TNYA)
Tenaya Therapeutics (NASDAQ:TNYA) is a company and stock focused on novel therapies against heart disease across three areas: cellular regeneration, gene therapy, and precision medicine.
It is using viral vectors to deliver genetic information to cells and studying disease models to identify new therapy target areas.
The company focusses on heart disease, which is the global leading cause of death. Heart attacks kill functioning muscle cells, which leads to immediate death or complications that later cause death.
Gene therapy can help regenerate cells that die due to heart attack or restore function in defective cells.
The company makes minimal interest income but is otherwise pre-revenue and posted a $123.66 million net loss in 2022.
Current funding looks to be sufficient through the first half of 2025 and the company continues progressing cardiomyopathy and heart failure trials.
The positive news for current investors is simply that there is so much upside for the company and its products. Shares trade for $5.50 but bear an average target price of $21.50. That’s clearly a function of the economic burden of heart disease.
INmune Bio (INMB)
It’s fairly easy to guess the business of INmune Bio (NASDAQ:INMB) stock based on its name. If you assumed the company is attempting to harness the power of the immune system, you are correct.
The company is focused on modulating the innate immune system to invoke a response against cancer and Alzheimer’s disease.
The firm’s leading candidate is called INKmune and is an IV infusion designed to awaken dormant natural killer (NK) cells.
NK cells facilitate communication between the innate immune system and the adaptive immune system. NK cells also function to kill precancerous cells that circulate in our bodies regularly.
INKmune therapy is being studied for its efficacy in eradicating cancer remaining after chemotherapy and cancer in order to prevent future relapses.
INmune Bio’s XPro 1595 targets inflammation in the brain and is being studied in relation to Alzheimer’s disease.
INMB stock currently trades for $7.80 and reached a 52-week high of $11.78 while carrying an average target stock price of $18.00.
In discussing Synlogic (NASDAQ:SYBX) stock, let’s begin with the upside because it’s substantial. SYBX shares carry an average target price of $7.17 yet trade for $0.65. They are therefore a 10X opportunity based on Wall Street consensus.
The company reported a small amount of revenue in the most recent quarter but is for all intents and purposes, pre-revenue. It lost $16.7 million during the same period. Why, then, should investors be excited about the firm’s prospects?
Essentially, it boils down to its Phenylketonuria program, which is on track for phase 3 trial initiation in the first half of this year.
Phenylketonuria is a disorder that causes an amino acid to build up in the blood which can cause intellectual disabilities. The company was also granted a Rare Pediatric Disease Designation for drug development related to PKU and homocystinuria.
The company has approximately $77.6 million in liquidity, which is part of the reason it is low-priced and risky given $66 million in overall losses in 2022.
On the date of publication, Alex Sirois did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.