The pandemic pushed major biotech stocks into the spotlight as vaccine demands rose to unprecedented highs. Investors flocked to the industry in the next few years after the COVID-19 breakout. However, interest soon waned, and the money flowed elsewhere. Furthermore, higher interest rates and tighter regulatory environments forced some companies to cut spending, limiting growth.
While biotech may not be the flavor of the day, there are still opportunities available to investors willing to buy companies that offer the potential to revolutionize medicine and how we fight against complex diseases. A close look at some of the companies in the sector may pose another potential for investors to take advantage of these medical developments. In this article, we will look at three biotech stocks that have promising growth potential.
Zymeworks Inc. (ZYME)
Zymeworks Inc. (NASDAQ:ZYME) is a biotech company that specializes in multifunctional biotherapeutics meant to treat cancer and other serious diseases. Zanidatamab, its lead product, is a bispecific antibody that targets human epidermal growth factor receptor 2 (HER2) domains. It also has a second product, Zanidatamab zovodotin, which is a combination of biparatopic antibody design and auristatin antibody-drug conjugate (ADC) technology that is comprised of a cleavable linker and a cytotoxin. Not only that, ZYME has several products in its pipeline focused on developing ADC and MSAT (multi-specific antibody therapeutics) and discovery-stage programs in oncology, as well as two lead programs for preclinical products.
The company reported an impressive 44% decrease in net loss for the first nine months of 2023 on a YoY basis, attributed to its strong revenue growth. Their collaborations with Jazz Pharmaceuticals and other partners substantially and positively impacted its financials. ZYME’s recent presentations showed promising clinical data for its lead candidate, Zanidatamab, which was used to treat various cancers, and its Phase 3 trial results are expected in 2024. In addition, ZW251, a pipeline investigational drug candidate for liver cancer, also strengthens its future potential growth. These announced financial improvements, strong collaborations, and a robust pipeline put Zymeworks Inc. as a top contender for any list of biotech companies to buy.
Vertex Pharmaceuticals (VRTX)
Vertex Pharmaceuticals Incorporated (NASDAQ:VRTX) is a biotechnology company specializing in treating and developing cystic fibrosis (CF) medicine. The company has a pipeline of mid and late-stage clinical programs in complex diseases like kidney disease, type 1 diabetes, beta thalassemia, acute and neuropathic pain, muscular dystrophies, and so much more. It offers medicines like TRIKAFTA/KAFTRIO, ORKAMBI, and KALYDECO and has a series of disease therapies in its pipeline. The company is known for its cystic fibrosis treatment Trikafta.
VRTX previously announced the approval of the European Commission for its proposed KAFTRIO®-Ivacaftor combination treatment for cystic fibrosis for children. The company has also reported a solid third quarter that showcased a 6% increase in its product revenue due to the continued success of TRIKAFTA®. Reported EPS also beat analyst estimates by 3.97%. Its current pipeline of potential near-term launches includes exa-cel for sickle cell disease and beta thalassemia, Phase 3 studies for the vanzacaftor-tezacaftor-deutivacaftor combination for cystic fibrosis, and VX-548 for pain. VRTX is in a position to further its growth, and that is why it’s one of the top biotech stocks to buy right now.
Medpace Holdings, Inc. (MEDP)
Last on our list of biostocks to buy is Medpace Holdings, Inc. (NASDAQ:MEDP), a medical device services & drug research company that offers scientifically-driven clinical development services in the pharmaceutical, medical device, and biotechnology industries. It partners with several companies in the industry and provides them with product development services and execution of clinical trials. MEDP also offers full-service Phase I-IV clinical development services up to post-marketing clinical support. Its clinical trial services include bio-analytical laboratory services, imaging services, clinical human pharmacology, and electrocardiography reading support for clinical trials.
MEDP’s strong third quarter has showcased impressive results, with revenue growing 28.3% YoY. It also beat earnings estimates by 8.82% and is highly recommended by analysts. Even though the company experienced a slight dip in its net income margin to YoY (from 17.2% to 14.3%), its GAAP net income rose to $70.6 million and a strong EBITDA margin of 18.3%. Its consistent momentum and growth make it one of our top choices for biotech stocks right now.
On the date of publication, Rick Orford 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.
