The biotech sector holds some of the most promising and popular stocks on the market. With the promise of breakthrough treatments that generate billions of dollars annually, investors always look for the next up-and-comer. And within this popular market are stocks that are valued well below their potential.

These three biotech stocks have some of the most promising treatments awaiting approval. But they aren’t trading at a value reflective of the likely explosive future growth. Investors should take advantage of the opportunity to buy these stocks at a lower price. Then plan to hold them as massive sales and approvals send their stocks higher and higher.

We’ll detail the current valuations of these stocks and the treatments that each has coming down the pipeline.

CRISPR Therapeutics (CRSP)

CRISPR Therapeutics (NASDAQ:CRSP) offers a relatively unique set of treatments specializing in gene editing. The company’s best-selling treatment, Casgevy, targets transfusion-dependent beta-thalassemia and sickle cell disease. After receiving Food and Drug Administration (FDA) approval for the treatment in late February, CRISPR saw a short rise but has since been on the dip.

Also, CRISPR’s most recent earnings report for Q1 included news of 25 authorized treatment centers activated globally for Casgevy. However, the company reported a net loss of $116.6 million. The number is up from last year’s $53.1 million. And along with a revenue miss, investors are not taking to the news lightly. 

However, the sinking price creates an excellent opportunity to buy CRISPR at its lowest price in years. Increased commercial and manufacturing costs primarily drove the net loss following the full release of Casgevy. On the other hand, that same surge created $2,108.1 million in cash, up from last quarter’s $1,695.7 million.

Indeed, CRISPR will likely bounce back from this costly quarter. Further, it will continue to climb the biotech ranks as Casgevy spreads throughout the many countries.

Axsome Therapeutics (AXSM)

An excellent pick for biotech stocks, Axsome Therapeutics (NASDAQ:AXSM) has diverse and plentiful treatments coming down the pipeline soon. The company’s most prominent drug is Auvelity, which is used to treat major depressive disorder. Auvelity promised and reached $130.1 million in sales for 2023, its first full year on the market.

In its most recent earnings report for Q1 of 2024, AXSM reported a considerable boost in net product revenue, which increased 160% year-over-year (YOY). The jump is mainly due to Auvelity’s sales. But, the company has several other promising treatments in later phases of clinical trials, such as AXS-07, AXS-12 and AXS-14. 

Also, Axsome Therapeutics reported a net loss of $68.4 million, which was primarily due to a significant increase in research and development expenses. While some investors may be hesitant due to a slight dip in EPS, the money is going to the right place to support AXSM’s future growth. 

The company’s future treatments target relatively common conditions, such as migraines (AXS-07) and narcolepsy (AXS-12). AXS-07 is already quite close to the end of phase 3 clinical trials and is set to submit a request for and receive FDA approval next year.

Axsome Therapeutics may be making heavy investments right now. But the potential of the drugs coming down the pipeline is undeniable and is sure to send Axsome soaring. 

Iovance Biotherapeutics (IOVA)

Taking a unique and breakthrough approach to treating cancer, Iovance Biotherapeutics (NASDAQ:IOVA) is one of the most anticipated biotech stocks. The company’s TIL therapy, Amtagvi, won FDA approval in February of this year. Furthermore, the stock hit its peak for this year shortly thereafter. 

So far, IOVA developed Amtagvi to treat metastatic melanoma but has a handful of other therapies utilizing TILs in the pipeline. The company reported a $116.4 million net loss for Q4 last year but primarily burnt cash on research and development. To combat such loss in the future, though, is Iovance Biotherapeutics’ ace up its sleeve, Proleukin.

The company acquired the rights to Proleukin, an interleukin treatment, with full approval in early 2023. Then, it commercialized Prolelukin and is selling it on the market. For investors worried about Iovance Biotherapeutics’ ability to fund its operations, the good news is the company expects revenue from Proleukin and Amtagvi to fund all plans comfortably into 2025. 

While Iovance Biotherapeutics is temporarily valued lower, investors can buy this extremely promising stock. Therefore, they may have high hopes for the returns it will bring in the foreseeable future.

On the date of publication, Joel Lim 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.