Biotech stocks aren’t for everyone. But if you want to dive into a sector that can potentially give you incredible returns, you’ll want to focus your search on A-rated biotech stocks.
Biotech companies are involved in the study of organisms, cells and biological systems to develop products, applications and treatments.
These companies are deep into research and development and could spend millions to research products in hopes of a scientific breakthrough and regulatory approvals.
But it’s not easy. If you invest in biotech stocks, you have to be comfortable with the idea that your company could live or die with the success or failure of a single drug or product.
That means that the industry is affected not only by the results of clinical trials but also by regulatory decisions, which could take months.
But if your company hits, the results can be life-changing for investors and patients who benefit from the new treatment or product.
I’ve used the Portfolio Grader to identify some top-rated biotech stocks that are worth a look at today. If you are eager to enter the sector, this is an excellent place to start.
ANI Pharmaceuticals (ANIP)
Located in Minnesota, ANI Pharmaceuticals (NASDAQ:ANIP) develops, manufactures and markets branded and generic prescription medications. It has dozens of successful products on the market.
Currently, the company is focusing on building a purified franchise cortrophin gel, a medication injected under the skin or muscle to treat autoimmune and inflammatory conditions.
It’s also working on expanding and strengthening its generic medications business.
So far, business is going well. Second-quarter earnings were $116.55 million in revenue and earnings per share of $1.28, beating analysts’ estimates of $99.86 million in revenue and EPS of 67 cents.
ANIP stock is up 50% this year and has an “A” rating in the Portfolio Grader.
ImmunoGen (NASDAQ:IMGN) is a biotech company developing antibody-drug conjugate technology to combat cancer. ADCs are cancer-killing toxins attached via a biodegradable linker to a specific antibody.
ImmunoGen works on finding the correct combination of cancer targets, antibodies, payloads and linkers to develop effective ADCs that a cancer patient can tolerate.
It currently has an ovarian cancer drug, Elahere, to market, and several other drugs in various stages of development. One of those tests also involves Elahere, which got positive results in May as a second potential treatment for cancer.
Earnings for the second quarter were sales of $83.15 million, which beat analysts’ estimates of $46.6 million. But the company’s still losing money, as its EPS was a loss of 2 cents per share.
But investors aren’t concerned, and you shouldn’t be either. IMGN stock is up 180% this year and has an “A” rating in the Portfolio Grader.
Wave Life Sciences (WVE)
Wave Life Sciences (NASDAQ:WVE) is a clinical-stage RNA medicine company developing treatments for conditions such as muscular dystrophy and Huntington’s disease.
RNA therapeutics involve using ribonucleic acid molecules as agents to treat diseases, either through messenger RNA (mRNA), small interfering RNA (siRNA) or microRNA (miRNA).
RNA drugs are interesting from an investor’s perspective because the treatments can be developed and produced quickly, as it was for the development of Covid-19 vaccines.
Wave Life Sciences currently has two drugs in clinical Phase 1 or 2 testing and says it’s “on the cusp” of moving the industry’s first RNA editing therapeutic candidate to clinical testing.
Considering the company’s deep into the testing and development phase and doesn’t have products to bring to market yet, the stock is volatile. But the company is building momentum and was added to the Russell 2000 and Russell 3000 indices in June.
WVE stock has an “A” rating in the Portfolio Grader.
Enliven Therapeutics (ELVN)
Enliven Therapeutics (NASDAQ:ELVN) is a biotech company in Boulder, Colorado, working on cancer treatments.
Its research involves developing kinase inhibitors to block overactive proteins that trigger abnormal cell behavior and growth.
Its most advanced candidate is in Phase 1 clinical trials. ELVN-001 is a potential treatment for patients who have chronic myeloid leukemia. It’s also testing a drug to potentially treat non-small cell lung cancer.
ELVN stock jumped earlier this year when it completed a savvy move – it closed a merger with Boston rare disease specialist Imara after that company had two Phase 2B trials fail. By buying the distressed stock and raising $165 million from institutional investors to fund research, Enliven acquired some assets on the cheap.
ELVN stock is up 328% this year and has an “A” rating in the Portfolio Grader.
Nuvalent (NASDAQ:NUVL) is also focused on cancer treatments. The company develops small molecules to overcome resistance, minimize adverse events, address brain metastases, and drive more durable patient responses.
It has two drug candidates in clinical trials to treat non-small cell lung cancer and other solid tumors. With $431 million in financing in hand, the company says it has a cash runway into the second half of 2025. The company reported a net loss of $29.1 million in the second quarter, with nearly $26 million coming from research and development expenses.
However, investors are bullish on the stock. The price nearly reached $50 per share earlier this summer, and even after a modest pullback is up 46% this year.
NULV stock has an “A” rating in the Portfolio Grader.
Eli Lilly and Company (LLY)
Eli Lilly and Company (NASDAQ:LLY) is a major pharmaceutical company in Indianapolis. The drugmaker has high hopes for two drugs that could bring windfalls to investors.
First, there’s donanemab, a treatment for Alzheimer’s disease that could get approval from the Food and Drug Administration in the next year. Then there’s tirzepatide, sold under the brand name Mounjaro to treat type 2 diabetes. Lilly is asking the FDA to approve the drug as a treatment for obesity. If approved, the change could mean $25 billion in annual revenues.
Lilly is also on a growth spurt. It recently announced plans to buy Versanis Bio, which is developing treatments for cardiometabolic diseases, for $1.925 billion. And it just closed its acquisition of Dice Therapeutics, which expands Lilly’s immunology portfolio.
LLY stock is up 44% this year and gets an “A” rating in the Portfolio Grader.
Novo Nordisk (NVO)
Novo Nordisk (NYSE:NVO) is a Danish pharmaceutical company that focuses on developing treatments for diabetes.
Diabetes affects an estimated 537 million adults around the world, and that number is expected to rise to 643 million by 2030.
But a significant catalyst for Novo Nordisk is interest in its weight loss drug, Wegovy. The drug is so popular that doctors often report shortages and then prescribe another Novo Nordisk drug, Ozempic, as an alternative.
Wegovy is already available in the U.S. and Denmark, but Novo Nordisk is now introducing it in Germany, making it the first launch of the drug into a large European market. Investors should be excited about the potential of other European Union countries opening their doors to Wegovy.
NVO stock is up 35% this year and has an “A” rating in the Portfolio Grader.
On the date of publication, Louis Navellier had long positions in NVO. Louis Navellier did not have (either directly or indirectly) any other positions in the securities mentioned in this article.
The InvestorPlace Research Staff member primarily responsible for this article did not hold (either directly or indirectly) any positions in the securities mentioned in this article.