These biotech stocks are swinging for the fences. They may hit homers, they may strike out. But you’ll definitely want to watch them.

Biotech stocks have been a high risk, high reward proposition in recent years. Many biotech companies soared high during the pandemic only to crash hard in its aftermath. We now search through the wreckage to see which will soar again, and which are best left for dead.

For an investor who wants stability and low risk, there are plenty of big biotech stocks out there. There also are new players in biotech who threaten to upend the entire industry.

Investing in high-risk stocks requires an understanding of the many avenues open to the company itself. Some companies are navigating through clinical trials, some are building revenue partnerships.

A new announcement in either field could send the stock flying high or tumbling off a cliff. Knowing what to expect from these companies in the near future will give you an edge.

But for all that said, there’s no guarantee any of these investments will pay out. But if they do, they’re liable to pay out big time. So here’s some of the best high-risk biotech stocks to keep on your portfolio watch list.

DNA	Ginkgo Bioworks	$1.28
MRNA	Moderna	$126.24
VKTX	Viking Therapeutics	$22.97

Ginkgo Bioworks (DNA)

Ginkgo Bioworks (NYSE:DNA) is a new kind of synthetic biology company. When a company wants to sell a new drug, they have to do R&D to scale up production while maintaining a high level of purity.

Ginkgo wants to be the company that does this service for other companies. In return, Ginkgo wants a cut out of future profits. They hope to make themselves the Apple App store of Biotech.

In theory this is a good deal for companies and a great deal for Ginkgo.  Ginkgo takes on risk by putting in the money to find ways of producing a drug at scale. For a small company with only a few drugs, that can be a lifesaver. Ginkgo’s cut from should give it Big Pharma-grade revenue, without doing clinical trials itself.

That idea hasn’t yet worked out. Their Q1 2023 earnings show $81 million in revenue, while Q1 2022 was $168 million. Meanwhile they had a net loss of $205 million, though Q1 2022 was $675 million. The only bright spot is that the loss in revenue is driven in part by the loss in COVID-related services, which were always expected to fade.

But the optimistic case is that Ginkgo still has $1.2 billion in cash, and can keep burning for a good while yet. If they can get even a few big partnerships, all their losses will be worth it. If they can’t convert, they won’t last many more years.

Since its IPO, Ginkgo has had enormous volatility both up and down. 25% swings in price are commonplace. If they can get their revenue sorted, their business model will be a huge winner. If they can’t they’re likely to crash and burn sooner rather than later.

Moderna (MRNA)

Moderna (NASDAQ:MRNA) is the maker of the 2nd most successful COVID vaccine in America.

Their company’s big idea is that mRNA vaccines are the future and can be made quicker and cheaper than traditional vaccines. That idea worked for COVID, but hasn’t had as much luck since then.

Moderna’s stock has been battered by clinical trial failures. Their flu vaccine failed to show better results than what is currently on the market. And while they are studying an RSV vaccine, they’ve already been beaten to the punch by GSK PLC which may leave their vaccine without a market.

Moderna has a large stockpile of cash, but they need to turn it into future revenue in order to justify their valuation.

Moderna’s Q1 2023 earnings show them with $3.4 billion in cash, so they’re unlikely to go bankrupt soon. But their main source of revenue remains COVID vaccines, which are becoming less and less relevant now that most people are vaccinated.

Their total revenue in Q1 2022 was $6.1 billion, while in Q1 2023 it is now $1.9 billion. That kind of drop needs to be replaced with new vaccines, or their high valuation will not be justifiable.

Moderna has had one grand slam. But they also need to hit singles and doubles if they want to win the Pennant. If none of their new drugs can get approval soon, their COVID cash will eventually dry up, and that would be very bad news for their investors. But if they can make the promise of mRNA vaccines work, they can fly again as they did during the pandemic.

Viking Therapeutics (VKTX)

Viking Therapeutics (NASDAQ:VKTX) has had a very promising 2023. They announced very good early results for an obesity drug in March. They then quickly used those good results to sell $250 million in stock to raise cash. That cash was desperately needed, their Q1 2023 earnings (prior to the stock sale) showed just $18 million in cash and cash equivalents. For a company losing $19 million a quarter, that was not a good place to be in.

Recency bias may make Viking seem like a sure bet, and they are certainly in a good place. Their cash after the stock sale gives them a long runway.  And the market for obesity drugs is certainly worth billions. But at this moment they are still a risky play.

Their stock has soared on Phase 1 clinical trial data. There are still multiple phases after that, and then FDA approval, before they can even begin to try to sell their drug.

Any negative news out of future trials could send their stock falling just as fast as it came up. Viking has most of their eggs in a single basket. Their current pipeline lists just 3 drugs with just 2 biological targets. If any of their drugs or drug targets are unusable, they have little to fall back on.

Six months ago, Viking was worth just one fifth of what it is worth today. In another few years it could be worth ten times or one tenth of what it is worth currently. The clinical trials will be the deciding factor, so if you’re watching this biotech stock, watch those as well.

On the date of publication, John Blankenhorn did not hold (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.