Synthetic biology refers to using engineered organisms to produce products for multiple industries. Specifically, the pharmaceutical, biotechnology, and agriculture sectors are set to benefit most from synthetic biology.
These are high-risk stocks overall. Firms in this industry face significant hurdles to reach commercialization. They also aim to solve high-impact problems. For that reason and others, they have serious potential to produce dramatic returns. Synthetic biology stocks will continue to be highly attractive in 2023 and beyond for investors with higher risk tolerances. Let’s look at a handful of those companies that currently show strong potential.
Codexis (CDXS)
Codexis (NASDAQ:CDXS) is a producer of enzymes and biopharmaceuticals. The company’s main product is its enzyme engineering platform called CodeEvolver.
CodeEvolver allows firms to manufacture synthetic enzymes more efficiently than their natural counterparts. Another major benefit of synthetic enzymes is that they can be engineered to be more stable than in their natural form. CodeEvolver is attractive for that reason and allows enzymes that have a significantly extended shelf life relative to natural enzymes to be made.
The company is also developing another platform called ECO Synthesis, which manufactures RNAi therapeutics. The company expects that platform to be ready for Production purposes by the end of the year. RNAi stands for RNA interference and interrupts the expression of target genes.
Company-wide revenues have decreased this year but the company maintains a strong outlook on Wall Street. Further, Codexis has given guidance that it anticipates positive cash flow by the end of 2026. Based on ratings alone, it’s reasonable to anticipate that an investment in Codexis could create 200% returns.
Ginkgo Bioworks (DNA)
Ginkgo Bioworks (NYSE:DNA) Is among the more prominent stocks in the synthetic biology space. The company is located in Boston, Massachusetts, which is a leading hub in the biotechnology industry.
Ginkgo Bioworks is developing a platform that promises to, in the words of the company, enable customers to program cells as easily as we program computers. Like Codexis, Ginkgo Bioworks also enjoys a strong potential upside based on Wall Street estimates.
Fundamentally, Ginkgo Bioworks is currently working through some issues. Revenues in the third quarter fell from $66 million to $55 million. That said, there continues to be plenty of room for optimism regarding the company’s stock.
The company added 21 new programs to its Foundry Platform, representing 40% growth. Further, it partnered with Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL) which leverages the firm’s cloud capabilities.
Most importantly, Ginkgo Bioworks entered into an agreement with Pfizer (NYSE:PFE) during the quarter. That agreement Includes potential developmental and commercial milestone payments worth as much as $331 million.
Amyris (AMRSQ)
Amyris (OTCMKTS:AMRSQ) Is the riskiest stock on this list of already risky stocks. The company leverages plant-based sugars to produce Synthetic chemicals. The company then sells those synthetic chemicals into end markets including cosmetics, fragrances, flavors and nutraceuticals.
The company voluntarily entered Chapter 11 bankruptcy, which provided for restructuring. The decision to do so caused its share prices to plummet dramatically. When the announcement was made in early August share prices fell from 59 cents to one penny. Investors can pick up shares at that price currently.
Thus, there’s a very reasonable argument to be made that Amyris continues to be a worthwhile investment. One reason to believe that is based on the lone Wall Street rating on its stock. That rating values Amyris stock at $1.50. Thus, it’s mathematically feasible that an investment of $6,667 could turn into $1 million.
The company intends to restructure in order to focus on biofermentation as the main driver of its business. At one penny it remains one of the more interesting synthetic biology stocks available to investors.
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.
