While the S&P 500 remains up on the year, the biotech sector is down. Even though the broader market is showing signs of strength in areas like AI and automation, those trends haven’t benefited biotech stocks as much.
Still, many biotech stocks to buy are positioned well for the coming quarter and new year. These show amazing drug portfolios, promising growth potential, and world-class technology.
Because the world’s population continues to grow and age (as it always has), it needs more food, fuel, and resources to survive. In addition, drugs and treatments are needed support aging populations worldwide. Synthetic biology and drug companies will shine as some of the best-positioned biotech companies of the coming decade.
Let’s examine some of the top biotech stocks to buy as we look into 2024.
Ginkgo Bioworks (DNA)
Ginkgo Bioworks promises that they can design and test microorganisms cheaper and more efficiently than any other company. In turn, those microbes will create the drugs, additives, and other chemicals used in products from healthcare to makeup. But DNA’s newest ingredient is the self-reinforcing power of artificial intelligence.
They convert microorganisms into data. Ginkgo can collect data on ways mutations affect the microorganisms at every level. And it can feed that data into AI to predict the mutations that prove most beneficial. Then, the next time Ginkgo gets a project, they may have to test only hundreds of organisms rather than thousands. Then test just tens rather than hundreds. With every successful project, Gingko is creating not only sales, but data to power its AI.
Other companies have taken notice. Ginkgo has been on a collaborations tear, signing agreements with such heavy hitters as Novo Nordisk (NYSE:NVO) and Pfizer (NYSE:PFE). DNA looks like the company best positioned to benefit from the AI revolution, making them a key biotech stock to buy.
Eli Lilly (LLY)
Eli Lilly’s (NYSE:LLY) diabetes drugs have powered an 85% increase year over year (YOY) in net earnings. With a huge array of phase 3 clinical trials underway, Eli Lilly is primed to explode with growth in the new year.
Eli Lilly’s strongest pillars have been its disease targets and new methods. LLY is wisely spending a large amount of its time targeting the diseases of an aging and increasingly sedentary population. Cancer, Alzheimer’s disease, obesity, and diabetes, will continue to increase their proportions in our population as we become older and unhealthier as a species.
Additionally, Eli Lilly has brought strong new methods to the field of drug discovery and approval. They are not only partnering with AI companies to discover drugs but also using AI in the drug approval process. When data is shown to regulating authorities, it needs to be presented in the most convincing manner possible. Eli Lilly has partnered with Yseop to use natural language processing to make as persuasive an argument as possible.
In short, LLY will be getting drug approved faster and with greater regularity.
Vertex Pharmaceuticals (VRTX)
Typical pain medications tend to have addictive properties and hefty side effects. But VX-548 promises to sidestep those problems entirely. By blocking the voltage-gated sodium channels that cause the sensation of pain, VX-548 can block pain entirely without being addictive.
And, Vertex is a hugely visionary drug company for many diseases. They are trialing a CRISPR/Cas9 therapy that could completely cure Sickle Cell Anemia. By bringing cures to diseases which until now have had only treatments, Vertex is promising a revolution in medicine that could bring big gains to investors.
Vertex has multiple trials ending in 2024. It’s allowing them to bring cures and treatments to many of our most vexing diseases. The science behind VRTX’s clinical trials is offering truly transformative therapies where other companies can only offer temporary relief. Vertex deserves a spot on your buy list.
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.