Why do investors love biotech stocks? Because these players often work on game-changing technology that could lead to tomorrow's game-changing treatment -- and potentially blockbuster revenue. As an investor, you often have to be patient, as it takes years for a company to bring a candidate through development and reach the billion-dollar revenue stage. And you have to be comfortable with a bit of risk too, because candidate failure always is a possibility.
But, if you choose quality companies with strong pipelines and at least one of their potential products succeeds, you could be in for significant gains over time. And today, with just $200, you can get in on three companies that have reached the finish line or are approaching it and have what it takes to soar over the long run. Let's check out these three no-brainer biotech buys.
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1. Viking Therapeutics
Viking Therapeutics(NASDAQ: VKTX) is working on a candidate designed to address one of today's highest-growth areas: weight loss. The weight loss drug market may reach $100 billion by the end of the decade, according to Goldman Sachs Research. Today, big pharma companies Eli Lilly and Novo Nordisk dominate here, but demand is so high they've been unable to keep up with it -- so there's room for additional players.
Viking has reported fantastic results from trials of its injectable candidate and the oral form of that potential drug. It works in the same way as Lilly's current drugs, Mounjaro and Zepbound, acting on blood sugar levels and appetite. The company now is readying to advance the injectable candidate into a phase 3 trial and the oral one into phase 2.
This biotech is known to surge on good news, jumping about 120% in one trading session earlier this year as it reported positive trial results, and it's climbed more than 190% so far this year. If the Viking candidate continues to impress, more big gains may be on the horizon.
2. Moderna
Moderna (NASDAQ: MRNA), a coronavirus vaccine giant, has struggled as that market opportunity continues to shrink. In the most recent quarter, the biotech once again lowered its revenue forecast -- to the range of $3 billion to $3.5 billion from an earlier forecast of $4 billion. But it's important to keep a couple of things in mind.
First, the coronavirus vaccine market may not be as big as it used to be, but it still could result in billion-dollar annual revenue for the company over time. And Moderna recently reported positive data from a phase 3 trial of its combined flu/coronavirus vaccine candidate -- such a product could potentially attract a broad audience on an annual basis. And second, Moderna has a vast pipeline and is making progress on a number of late-stage programs, including a personalized cancer vaccine.
All of this means that in the coming years, Moderna's revenue may soar. Meanwhile, the company has lowered operating costs to bring expenses more in line with revenue opportunities. Moderna stock may be down and out now, but patient investors could win big over the long term by buying shares on the dip.
3. CRISPR Therapeutics
CRISPR Therapeutics(NASDAQ: CRSP) climbed in the double digits last year as investors bet on its ability to win approval for gene-editing therapy, Casgevy. That product, to treat blood disorders sickle cell disease and beta thalassemia, reached the finish line and eventually could drive revenue growth at CRISPR Therapeutics.
Why do I say "eventually"? Because the treatment process is a long one, requiring months, and that means it will take time for the biotech to generate significant revenue. And this may be why investors have neglected the stock in recent times. But it's worth picking up shares of CRISPR Therapeutics and holding on to benefit not only from Casgevy down the road but potentially from other products too.
CRISPR Therapeutics is working on candidates in oncology, autoimmune diseases, and diabetes. The company's gene-editing technology could result in game-changing products, because the edits correct a faulty gene -- resulting in functional cures. And with $2 billion in cash, this biotech has the resources necessary to see its candidates through development.
All of this makes CRISPR Therapeutics a no-brainer buy now, while it's down -- and one that could greatly pay off over the long term.
Should you invest $1,000 in Viking Therapeutics right now?
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Adria Cimino has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends CRISPR Therapeutics and Goldman Sachs Group. The Motley Fool recommends Moderna and Novo Nordisk. The Motley Fool has a disclosure policy.
