When it comes to biotech stocks, I usually like to take a “Goldilocks” approach. This involves investing in biotech companies that have one or more promising drugs in mid-to-late stage clinical trials, as companies with early stage drugs are too risky for me. Unfortunately, a high percentage of drugs that have not yet undergone clinical trials or are in early-stage clinical trials end up failing. As a result, I avoid the shares of companies whose only drugs are in these stages. On the other hand, it’s difficult for large biotech companies to generate enough revenue from their new drugs to meaningfully increase their top and bottom lines. Consequently, I do not generally buy many large-cap biotech stocks. With that said, here are three biotech stocks that fit my criteria and are poised to have breakthroughs in 2024.
Shockwave Medical (SWAV)
Shockwave’s (NASDAQ:SWAV) products utilize shock waves to break up calcified plaque within arteries that lead to cardiovascular disease. Starting in 2024, the company will benefit from a decision by the Centers for Medicare & Medicaid Services to create new codes for the treatment offered by Shockwave. The company announced in August that these new codes resulted in higher payments than previous ones utilized by Medicare.
As a result, Shockwave should be able to meaningfully increase the prices that it charges healthcare providers for its products.
Moreover, SWAV is already reporting strong financial results, as its revenue jumped 42% last quarter to $186 million. Meanwhile its EBITDA, excluding certain items, advanced 31% year-over-year to a robust $65 million.
CRISPR Therapeutics (CRSP)
CRISPR Therapeutics (NASDAQ:CRSP) has developed a treatment for sickle-cell anemia called Exa-cel. Known as a “gene-edited therapy” the treatment works by modifying genes in sickle-cell anemia patients. The company partnered with Vertex Pharmaceuticals (NASDAQ:VRTX) on the project.
On October 31, most members of an FDA panel appeared convinced that the treatment is safe. Moreover, the FDA’s staff had previously determined that the data on Exa-cel was “extremely positive.”
Given these points, I expect the agency to approve the treatment next year, providing CRSP with a breakthrough.
Incyte (INCY)
Incyte (NASAQ:INCY) recently disclosed that Opzelura, its ruxolitinib cream that treats atopic dermatitis in children, had met the primary endpoint in a Phase 3 trial. The most prevalent form of eczema, the trial saw a significantly higher success rate in treating atopic dermatitis with a ruxolitinib than with a non-medicated cream.
Incyte’s cream also met all of the study’s secondary endpoints. Given the favorable Phase 3 results, I expect the FDA to approve the treatment next year.
On average, analysts expect Incyte’s revenue to come in at $4.2 billion next year. As a result, it would be difficult for many treatments to move the needle for the firm. However, I do expect INCY stock to get a significant lift from the drug’s approval.
As of this writing, Larry Ramer did not hold (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.
