Biotechnology is the source of some of our strongest and growing revolutions. Gene technology allows us to cure incurable diseases and make miracles happen with living organisms. Immunotherapies promise targeted treatment without harmful side effects. And more and more, we are understanding the deep structure of cancers, allowing us to develop treatments that promise a cure, not just remission. This has led to the rise of biotech stocks to buy.
However, the biotechnology sector has not yet reaped the rewards from all these revolutions. Many companies hold incredibly valuable intellectual property but still have no revenue. It will take time and money for clinical trials to run and for products to be commercialized. And while biotech stocks burn their cash, many investors will likely sit on the sidelines, waiting with their cash until a guaranteed winner emerges.
But if you only invest in biotech stocks after they get big, you’ll likely miss the greatest gains. No one can know exactly which biotech stock will one-day reign supreme. But if you invest in many of them, you can play the averages. And a single winner can make up for a dozen losers.
So, for investors willing to take a chance on a beaten-down sector and for those wanting to get in before everyone else sees the gold, here are seven biotech stocks to get in now before the rest of the market catches on.
Arcellx (NASDAQ:ACLX) is a company that is essentially pre-revenue. However, their patents on T-cell and antibody-based therapies are very strong. They are currently undergoing multiple clinical trials to treat leukemia and myeloma.
Arcellx’s strong scientific base is backed up by a good balance sheet as well. Their most recent earnings report shows a comprehensive loss of $24 million. With cash and cash equivalents of $304 million, Arcellx has a lot of runway to perform clinical trials. Add to that $204 million in marketable securities, and they are in no danger of running out of money if at least one of their treatments can be successful. This makes it one of those biotech stocks to consider.
The bottom line is that Arcellx has both the science and the money to become a hot commodity. Investing in clinical trials is, of course, always risky, as there is no certainty in which way the trial will turn out. But if you only invest after the trials are over, you’re missing most of the gains that come from biotech stocks. If you believe in the science of Arcellx, they’re one of the best biotech stocks to buy now.
Apogee Therapeutics (APGE)
Atopic dermatitis, also called eczema, is a very common condition. Almost 20% of people will experience it at some point in their lives. With itchy, swollen, or cracked skin, it isn’t usually fatal but is always a pain. However, Apogee Therapeutics (NASDAQ:APGE) hopes to treat it.
Apogee Therapeutics went public just this year in July and stayed above its IPO price of $17 per share. They are entirely pre-revenue, but they have an important drug called APG777, which hopes to treat eczema. APG777 is an IL-13 inhibiting antibody. And since IL-13 is known to be elevated in eczema, APG777 may help to control eczema by controlling IL-13
Apogee has only just started Phase 1 clinical trials this year, so they have a long way to go. But with so many sufferers of eczema, they have the potential to address a very large market. The bottom line is that if APG777 advances swiftly through clinical trials, the stock price is likely to rally hard. And so, if you believe in their science, now is the time to buy this biotech stock.
CRISPR Therapeutics (CRSP)
The science behind CRISPR Therapeutics (NASDAQ:CRSP) is hardly unknown, but it seems the market still hasn’t caught on to its true potential. While the broader market remains up year to date, CRISPR Therapeutics has fallen. However, the promise of gene editing remains.
CRISPR Therapeutics holds many of the necessary patents for the most transformational revolution in modern medicine. The ability to edit the genes of living people gives us the ability to cure genetic diseases that have previously been intractable. For a long time, genetic diseases have been regarded as “incurable,” but with CRISPR/Cas9 therapies, that is no longer the case.
CRISPR Therapeutic’s patents have already brought dividends, including collaboration payments from heavy hitters such as Vertex Pharmaceuticals. Drugs based on CRISPR Therapeutics IP are currently in clinical trials as well. If they make it out of trials and into commercialization, more collaboration payments will be forthcoming. It’s, therefore, one of those biotech stocks to buy.
The bottom line is that investors haven’t yet realized the true potential of CRISPR/Cas9 therapies. So now is the best time to get into this transformative biotech stock.
Many of the latest and greatest medicines are based on antibodies and the body’s own immune system. We all possess an immune system that has, over billions of years of evolution, created the most powerful and ingenious methods for defending us from disease. Harnessing that power is one of the next great trials for biotechnology.
Immunome (NASDAQ:IMNM) is harnessing the power of the immune system by creating antibodies and white blood cell-based therapies for a number of different diseases. Unlike classical drug treatments, which hope to destroy a disease directly, immune system-based treatments have all the power and specificity of the immune system at their disposal. This should mean that they can be more potent with less off-target effects. Immunome holds a wealth of patents in this area and has a number of drug candidates under research.
Immunome has also recently completed a merger with Morphimmune. They also received a private investment in public equity (PIPE) of $125 million, which they say should support operations until 2026 at least. Flush with cash and patents in a growing field, Immunome is a top biotechnology stock to watch.
Kinases are a major class of enzymes driving cancers. They act like light switches in the body, turning certain pathways on or off as needed. When everything is turned on all the time, cells divide uncontrollably, leading to cancer. Thus, kinase inhibitors have been some of the most successful anti-cancer treatments of the past decades.
Nuvalent (NASDAQ:NUVL) is taking a deep structural approach to treating cancers caused by kinases. By studying the precise shape of the misbehaving kinase, Nuvalent is creating extremely specific drugs, thereby killing the cancer without harming the patient. They are also using a targeted approach to ensure mutations cannot cause the cancer to develop resistance to their drugs. With multiple drugs in clinical trials and more on the way, Nuvalent is set up to make big moves in the near future.
As our population continues to age, diseases like cancer will become more and more prevalent. Nuvalent is positioning itself as a key company in treating those cancers, and so making it one of the most exciting biotech stocks to buy now.
Prime Medicine (PRME)
David Liu is one of the giants of gene editing. As an early researcher into CRISPR/Cas9 biology, he also helped advance prime editing, which is expected to be more safe than traditional CRISPR/Cas9. And he also founded Prime Medicine (NASDAQ:PRME) to help commercialize this technology.
Prime Medicine went public in 2022, and it holds valuable patents relating to the technology of prime editing. CRISPR/Cas9 technology cuts both strands of DNA and hopes that the cell’s own DNA repair machinery can paste the cuts back together. But that repair machinery is only so accurate, and double-strand cuts often lead to mutations. Prime editing, by contrast, makes cuts to only one strand of the DNA. Since single-strand cuts are easier to repair, prime editing should thus have fewer mutations and so fewer off-target effects than CRISPR/Cas9-based technology.
Gene editing is definitely the wave of future medicine, and prime editing may be safer than CRISPR/Cas9-based therapies. But a good investor knows that nothing is certain, so why not bet on both horses? With a revolution like this, a single winner will pay off massively.
Vir Biotechnology (VIR)
Vir Biotechnology (NASDAQ:VIR) gained prominence during the COVID-19 pandemic as it developed an antibody-based therapy against the disease. However, the drug could not remain effective in the face of COVID-19’s mutated subtypes, and in 2022, it was pulled by the FDA. Combined with the failed trial of prophylaxis against influenza, that has made the stock tumble in the past two years.
But the question isn’t “should you have bought Vir 2 years ago,” it is “should you buy them now?” And I say the answer is yes.
Despite recent high-profile failures, Vir still has a number of strong antibody-based drugs in its pipeline. According to its most recent earnings statement, it also has a strong financial position, with over $1800 million dollars in cash and short-term investments. With a net loss of $195 million, Vir still has a very strong runway. And with the recent bad news weighing it down, some investors may have forgotten the strength of its drug pipeline.
With immunology-based treatments for diseases from hepatitis to HIV, Vir is still in a position to make a big splash. And a single good clinical trial could send it soaring, just as a bad trial sent it tumbling. Vir is still a very strong biotech stock to buy.
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