Biotech Stocks Are on Fire: Here Are the Top 3 Picks for January
From CRISPR gene editing to modify ideal agricultural traits, synthetic biology to promote eco-friendly engineering, or even that relating to biofuels, the field of biotechnology, also known as biotech, offers exciting disruptive solutions with the potential to expand to market caps worth trillions! With new catalysts such as artificial intelligence and quantum computing offering methods to unlock complicated data sets to hasten drug development pipelines, it’s no wonder that this market has a projected compound annual growth rate of 13.96% from 2024 to 2023.
During the height of the pandemic’s lockdown, COVID-19 vaccines propelled many companies like BioNTech SE (NASDAQ:BNTX) into the global scene. As the demand for such products has dwindled, fierce competition has erupted to seize first-movers’ advantage in the next big biotechnological industry. In this article, we will highlight three innovative biotech companies that should be on any intelligent investor’s radar.
Biotech Stocks: Brainsway Ltd. (BWAY)
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Brainsway Ltd. (NASDAQ:BWAY) is a company leading the global spread of Transcranial Magnetic Stimulation (TMS) solutions to treat neurological conditions for those who fail to respond to other medications or therapy. With an increasing number of FDA approvals and expanding insurance coverage for disorders like OCD, BWAY’s potential has become supported by Yahoo! Finance analysts who predict the stock to trade at a one-year target of $10.50—roughly double its current price of $5.85.
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BWAY has recently shifted away from larger customers and enterprises. With an increased focus on promoting social media interactions and organic website traffic, its business strategy has shifted to maximizing the expansion of its technology into new customers. Looking at BWAY’s financials, we notice that tailwinds from improved insurance companies have boosted to upgrade them to a “Strong Buy” from Zacks due to optimism on earnings. With recent plans to expand TMS in South Korea to expand its international addressable market, BWAY is undoubtedly a cheap biotech stock all investors should consider investing in.
United Therapeutics (UTHR)
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United Therapeutics (NASDAQ:UTHR) makes and commercializes innovative drugs that help solve cardiovascular issues and other infectious diseases worldwide. Currently, 13 Yahoo! Finance analysts predict the stock to trade from $178 to $375 with an average of $288.
Recently, United Therapeutics’ UHeart, an artificial heart, was successfully transplanted into a human, marking a considerable breakthrough in the technology’s use. The company estimates that human clinical studies for seven of its artificial organs programs could occur starting in 2025, allowing it to expand into an emerging addressable market.
United Therapeutics currently holds an undervalued P/E ratio of 12.01X compared to the industry average of 19.27 and a solid EPS growth of 81.88% during the past three years. Its revenue and profits have grown around 28% over the past three years. With innovations and a fortress of financials, United Therapeutics is a fantastic choice for a biotechnology investment in the new year.
Vertex Pharmaceuticals (VRTX)
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Vertex Pharmaceuticals (NASDAQ:VRTX) is a biotechnology company with treatments ranging from sickle cell disease to cystic fibrosis. Yahoo Finance analysts project an optimistic one-year price target between an average of $420 to $500.
Vertex recently got FDA approval for Exa-Cel, aka Casgevy, a gene-editing therapy developed with CRISPR Therapeutics (NASDAQ:CRSP) to target sickle cell disease. With Casgevy being the first FDA-approved therapy utilizing CRISPR/Cas9, this groundbreaking FDA approval will help Vertex pave the way for future innovative rare disease therapies.
The company has grown impressively over the past year, with net income increasing by 11.26%. Additionally, its product revenues have increased by over 6% to $2.48 billion, primarily due to its performance of Trikafta, a cystic fibrosis treatment. While its valuation ratios have become slightly over-inflated, we stand behind its strong free cash flow to form its R&D runway. While it has already carved out its CF niche, its recent venture into new addressable markets like pain management positions it as a strong stock pick to diversify any portfolio.
On the date of publication, Ian Hartana and Vayun Chugh 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.
Chandler Capital is the work of Ian Hartana and Vayun Chugh. Ian Hartana and Vayun Chugh are both self-taught investors whose work has been featured in Seeking Alpha. Their research primarily revolves around GARP stocks with a long-term investment perspective encompassing diverse sectors such as technology, energy, and healthcare.
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