The biotech industry, often recognized for its rapid innovation, can set investors up for outsized returns in the stock market. However, not all biotech companies have the capability of doing so.
High potential biotech stocks can be relatively easy to find when focusing on the right financial metrics and previous track records of success. Too often, prospective investors are wrapped up in the hopes and dreams that smaller biotech firms sell them. This results in investors taking on risks that are simply above their pay grade.
Moreover, certain forward looking statements regarding data and potential breakthroughs can be extremely misleading. This level of unpredictability regarding companies with little to no track record makes them extremely risky investments. Therefore, sticking with companies with previous success and strong financial performance is crucial to avoid losing money.
Now, let’s discover the top 3 high potential biotech stocks on track for 50% returns or more by 2028!
Vertex Pharmaceuticals (VRTX)
Vertex Pharmaceuticals (NASDAQ:VRTX), a global leader in treatment of cystic fibrosis (CF), stands out as one of the top high potential biotech stocks to buy. While this is its bread and butter, the company is advancing its treatment pipeline in areas such as sickle cell disease and pain.
Vertex has over 20 years of experience in research, development and commercialization of drugs for the genetic disorder, cystic fibrosis. The company has 5 FDA approved treatments addressing this disorder, including its flagship therapy Trikafta. This drug has been a huge contributor to its success and strong financial results since its approval back in 2019. However, Vertex is not a one trick pony and its therapy pipeline opportunities are extremely promising. In the 2023 fiscal year, revenue increased 10% year over year to $9.87 billion. Earnings per share rose 8% to $13.89 per share, and the FDA approval of Casgevy is now in commercialization. The FDA’s recent acceptance for vanzacaftor and VX-548 significantly boost Vertex’s already strong long term growth prospects.
United Therapeutics (UTHR)
United Therapeutics (NASDAQ:UTHR) is another underrated biotech company that has an extremely promising future. The company’s focus on developing treatments for rare lung diseases has significantly bolstered its revenue and earnings growth over the past two years.
United Therapeutics is an extremely unique company that has developed treatments for pulmonary arterial hypertension (PAH). This condition involves a high blood pressure in the arteries of the lungs, causing symptoms such as chest pain, fainting, swelling, and shortness of breath. Its notable FDA approved therapies, including Remodulin, Tyvaso and Orenitram, have made it a leader in this arena.
Moreover, United Therapeutics is also advancing new organ transplant technology. For instance, the company recently performed the world’s first successful xenothymokidney transplant. The transplant, which involves the transplant of organs from non-human animal species into humans marked its 3rd successful xenotransplant.
Additionally, in the second quarter, its revenue and earnings per share increased 20% and 12%, respectively. As the company develops and commercializes its pipeline of new therapies, UTHR stock will be on track for 50% returns or more by 2028.
Halozyme Therapeutics (HALO)
Halozyme Therapeutics (NASDAQ:HALO) is the final company on the list among high potential biotech stocks to buy. Its unique business model and proprietary drug discovery platform, ENHANZE, makes it an extremely compelling choice for investors seeking outsized returns.
Halozyme truly does not get the love and attention that it deserves. While the company is still relatively small, its financial performance is telling a different story. Since the pandemic, its revenue and earnings growth have been in the high double digits. Its business model, which includes a proprietary drug delivery platform, allows it to run a capital efficient company with extremely high profit margins. Additionally, this platform has commercialized therapies from industry leaders including Pzifer (NYSE:PFE), Johnson & Johnson (NYSE:JNJ), AbbVie (NYSE:ABBV), and Eli Lilly (NYSE:LLY). After reporting record revenue, earnings, and free cash flow in the 2023 fiscal year, growth continues to accelerate. In the first quarter, revenue increased 21% year over year to $196 million, with earnings per share more than doubling to 60 cents per share. With strong guidance and the advancement of ENHANZE partner products and pipeline, HALO stock is just getting started in 2024.
On the date of publication, Terel Miles 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.
On the date of publication, the responsible editor did not have (either directly or indirectly) any positions in the securities mentioned in this article.
