Many healthcare stocks suffer from COVID fatigue as profits fall amid a global decline in the virus’ spread. But medical innovations and technological breakthroughs are rapidly transforming the healthcare landscape, and biotech stocks are garnering unprecedented attention in the investment community.
These companies, operating at the intersection of biology and technology, promise groundbreaking treatments, therapies and solutions to some of the world’s most persistent medical challenges. As they push the boundaries of science, investors are keenly watching for opportunities that could translate into significant returns.
Here are three of the best biotech stocks to buy in August, mainly as good news pushes them to the front of investors’ radars.
CRISPR Therapeutics (CRSP)
CRISPR Therapeutics (NASDAQ:CRSP) reported a healthy earnings beat this week, topping analyst estimates by nearly 55%. Likewise, shared jumped 10% on the news. But an earnings beat isn’t the only bullish indicator for this biotech stock.
CRISPR remains the only pure-play gene editing biotech company on the market, making it the only game in town for investors with a long-term outlook. Earlier this year, the company announced the end of a series of FDA applications for sickle cell treatments. The submission marks a significant milestone for CRISPR as, in the words of the company’s chief medical officer, “within a decade, we have progressed from the discovery of the CRISPR platform to the first regulatory filings for a CRISPR-based therapy, which speaks to the transformative nature of CRISPR technology.”
While gene editing and CRISPR technology doubtlessly have a long road ahead, its first-mover advantage and institutional investor interest should prove beneficial as the company creates the future of healthcare today.
Amgen (AMGN)
Amgen (NASDAQ:AMGN) saw two cancer drugs break through clinical study barriers this week. Clinical studies are long and arduous processes with a massive attrition rate over time. Any news of therapeutics advancing to the next round is good, and two at a time is even better.
Supplementing Amgen’s recent win is a decent bench of revenue-producing products that help offset expensive research and development (R&D) costs. On August 3rd, the company saw another round of great news as it beat earnings estimates on the back of those product offerings. Revenue jumped 8% over the quarter, and much of that growth came from a 29% sales increase for the company’s flagship drug Amjevita.
The biotech company also enjoys global diversification, with 46% of net revenue coming from Asian-Pacific markets. Global exposure is critical for biotech companies to penetrate as many viable markets as possible, and Amgen’s proven its worldwide popularity.
Gilead Sciences (GILD)
Gilead Sciences (NASDAQ:GILD) appears highly undervalued in today’s market, and recent HIV drug wins might prove to be the tailwind propelling the biotech company back into fair valuation territory.
A recent quantitative analysis report indicates Gilead might be as much as 40% undervalued, with a $132 price target. At the same time, broad market consensus affirms the bullish outlook, albeit with a broad $100 price target.
Gilead remains one of the most agile of the large biotech companies, and the company’s profit margins for HIV and hepatitis C treatments are massive due to cheap manufacturing costs and dominance in physician protocols. The company also enjoys broad patent protection on its HIV therapeutic portfolio, asserting its position amid generic manufacturers and competitors.
Gilead may not have seen some of the breaking news wins as the other biotech companies in this article. Still, they remain a steady and consistent winner — albeit one substantially undervalued in August.
On the date of publication, Jeremy Flint held no 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.
