3 Precision Medicine Stocks That Could Benefit From the Industry’s Rise

Matthew Farley
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Now might be a great time for investors to consider investing in precision medicine stocks. For those who don’t know, precision medicine is an approach to disease treatment and prevention that tailors medical decisions to the individual patient. It aims to provide the right treatment at the right time for the right person. This may reduce complications for the individual.

Precision medicine stocks today are companies with high potential growth prospects within the healthcare sector. I’m interested in this industry because healthcare is typically seen as a stable but not aggressively growing sector of the economy. Precision medicine stocks aim to deliver strong returns for investors while potentially keeping the defensive qualities of the broader sector, thus providing the best of both worlds.

So, for this article, I’ve researched three of the best precision medicine stocks for investors to add to their portfolios. As we see a surge of interest in the industry, it is expected to grow at a CAGR of 11.5% through 2030.

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Pfizer (PFE)

Pfizer (NYSE:PFE), a global pharmaceutical company, includes precision medicine as a key component of its oncology portfolio.

For instance, the company has developed several targeted cancer therapies that leverage the principles of precision medicine. These therapies are designed to target specific genetic mutations or molecular pathways that drive the growth and spread of certain types of cancer.

Also, PFE has developed tests that work hand in hand with precision medicine. These tests help identify patients who are most likely to benefit from specific targeted therapies based on their genetic profiles or biomarkers.

The future looks bright for PFE in 2024, projecting revenues in the range of $58.5 to $61.5 billion. This forecast includes approximately $8 billion from its COVID-19 vaccine, Comirnaty, and the antiviral drug Paxlovid. Additionally, it expects around $3.1 billion anticipated from the acquisition of Seagen.

Adjusted R&D and SI&A expenses are estimated to range between $24.8 billion and $26.8 billion, aiming for a $4 billion cost reduction by the end of 2024.

These factors then make PFE one of those precision medicine stocks to buy.

Moderna (MRNA)

Moderna (NASDAQ:MRNA) is advancing in the precision medicine sector with its personalized cancer vaccine program. The biotech analyzes the genetic makeup of a patient’s tumor to identify unique mutations, known as neoantigens, that are specific to the cancer cells. It then develops a personalized vaccine to help give the patient the best chances for survival and recovery.

MRNA stock in general had an impressive year in 2023. It achieved a significant milestone, surpassing its revenue expectations with COVID-19 vaccine sales reaching $6.8 billion, slightly above the projected $6 billion. For 2024, MRNA is focusing on growth with an estimated revenue target of $4 billion.

The company is also gearing up for the launch of its mRNA-based respiratory syncytial virus (RSV) vaccine. It is aiming for a decision from the FDA by May 12. This new product could position MRNA alongside competitors in the RSV vaccine market.

As the personalized medicine industry continues to gear up, I anticipate that MRNA will be one of the leaders thanks to its impressive pipeline and exciting focus on this segment.

Relay Therapeutics (RLAY)

Relay Therapeutics (NASDAQ:RLAY) specializes in precision oncology, targeting previously ‘undruggable’ cancer forms. The company’s approach is centered around its proprietary Dynamo platform. It allows Relay to target specific protein conformations and suggest personalized treatment.

RLAY reported a significant increase in revenue for the full year 2023, totaling $25.55 million, up from $1.38 million in the previous year. Despite this revenue jump, the company experienced a widened net loss of $342 million for the year, compared to $290.5 million in 2022. Despite this, it ended the year with approximately $750 million in cash and cash equivalents. It expects these resources to fund operations into the second half of 2026​.

Still, analysts have a positive outlook on RLAY stock. An average stock price forecast of $23.69 suggests a potential increase of approximately 190% from the current stock price.

The company’s cheap valuation also sweetens the offer. With shares falling 50.48% over the past year, the stock is potentially undervalued.

On the date of publication, Matthew Farley did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Matthew started writing coverage of the financial markets during the crypto boom of 2017 and was also a team member of several fintech startups. He then started writing about Australian and U.S. equities for various publications. His work has appeared in MarketBeat, FXStreet, Cryptoslate, Seeking Alpha, and the New Scientist magazine, among others.

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