Biotech stocks to buy now reflect a more dynamic shift in investor focus of late.
Over the past few years, the biotech space attracted plenty of investor interest, driven by the Covid-19 pandemic. Global vaccine sales for the crippling virus were upwards of $142 billion from 2020 to 2023. The vaccine rollout was hugely successful across the globe, especially in countries like the U.S., U.K. and Germany.
Now, a couple of years after the lifting of lockdown restrictions worldwide, the buzz around vaccines has quieted. Vaccine sales are expected to drop substantially, with just $24.2 billion in sales expected over the next four years. However, with the pandemic firmly in the rear-view mirror, the focus has shifted towards biotech firms developing long-term solutions for chronic conditions.
That said, here are three compelling biotech stocks that fit the bill and have the potential to brighten up your investment portfolios. These companies spearhead the development of enduring therapies for recurrent long-term health problems.
Thermo Fisher Scientific (TMO)
Thermo Fisher Scientific (NYSE:TMO) is one of the top pure-plays in the biotechnology space. TMO provides the critical tools other biotech and pharmaceutical companies rely on to thrive. With its unique business strategy, TMO has maintained its relevance and stability in its niche over the past several years.
Its consistency is shown by its superb financial profile, marked by 14% and 16% revenue and EBITDA growth, respectively, over the past five years. Although sales of late have dropped due to a decline in Covid, TMO remains optimistic about a comeback. The enduring demand for analytical instruments, diagnostics and lab-related products and services continues to demonstrate healthy growth, which bodes well for TMO.
Furthermore, one of its standout initiatives is its foray into organ transplant testing, especially with its CXCL10 service. This urine test detects CXCL10 chemokines, improving outcomes for patients with kidney transplants. If it can further its competencies in this unique niche, it could unlock a massive potential revenue source.
CRISPR Therapeutics (CRSP)
Cathie Wood’s top biotech stock CRISPR Therapeutics (NASDAQ:CRSP) marked a significant milestone last year with the approval of Casgevy, its first market-ready gene-editing therapy. Casgevy has been developed in collaboration with Vertex Pharmaceuticals (NASDAQ:VRTX), offering new hope to roughly 35,000 patients suffering from transfusion-dependent beta-thalassemia and sickle cell disease. It is currently priced at $2.2 million per dose in the U.S., adding millions to the firm’s revenue base. Though currently in the pre-revenue stage, analysts estimate $81 million in sales this year.
Looking ahead, CRISPR and Vertex are looking to develop a Vivo version of Casgevy, which could substantially broaden the therapy’s reach. This forward-thinking strategy is set to transform treatment paradigms and boost CRISPR’s financial outlook. Additionally, it boasts a robust cash position at a whopping $2.1 billion, providing ample financial flexibility to continue advancing its business. Hence, with multiple promising gene-editing candidates in its pipeline, CRSP is one of the top biotech stocks to buy at this point.
Eli Lilly (LLY)
Eli Lilly (NYSE:LLY) is one of the leading biotech plays. Driven by its innovative diabetes and weight loss drugs in Mounjaro and Zepbound, these products add new layers to its growth story. They have provided year-over-year (YOY) top-line expansion at roughly 30% compared to its five-year average of 9%. Moreover, its YOY EBITDA growth is at an eye-catching 46%, more than 369% higher than its five-year average.
Further bolstering its prospects, the firm recently secured FDA approval for Donanemab, its groundbreaking Alzheimer’s treatment. The approval will create another massive income stream for the firm. With 6.9 million people in the U.S. alone living with Alzheimer’s. The trifecta of drugs targeting the most prevalent diseases in the country strengthens its market presence while offering superb upside potential ahead. These factors make Eli Lilly a highly attractive bet. It also offers a dividend yielding over 0.6% and nearly a decade of consistent payout growth.
On the date of publication, Muslim Farooque 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.
