Technology has changed just about every aspect of our lives. The way we travel, communicate, and even enjoy entertainment has been transformed. One of the biggest, yet most under-realized, transformations we’ve seen is in the biotechnology industry.
Ailments that were a death sentence just decades ago are now able to be treated, and in many cases, cured. Not only are these therapeutics changing the lives of patients and their families, but also the lives of investors that had faith in the companies producing these treatments early on.
As you could imagine, a new therapy addressing a large, unmet medical need, has the potential to generate significant profits. Not to mention, the innovation is continuing and there are plenty more of these opportunities on the stock market today.
So, what biotech stocks should you invest in right now? Here are a few names to watch very closely.
Three Biotech Stocks To Buy Right Now
At the moment, there are three biotech stocks on my radar, all of which are developing therapies and vaccines for serious conditions with significant unmet need in the healthcare system. They include:
Vertex Pharmaceuticals (NASDAQ: VRTX)
Vertex Pharmaceuticals is touted by many experts to be the best biotech stock on the market today. Why? Well, between a significantly positive financial position, soaring revenue, and a monopoly in the treatment of a major condition, it’s hard to find a reason not to invest in the company.
One of the big factors associated with the bullish thesis on Vertex Pharmaceuticals is the fact that the company saw a massive, 55%, increase in revenue year over year in 2020, generating nearly $3 billion in profits for the year. At the same time, the company has a massive stockpile of cash with around $6.7 billion in cash on its balance sheet.
So, where is all this cash and growth coming from? The company essentially has a monopoly in the cystic fibrosis, or CF space, with four different CF treatments on the market today.
The CF market is a massive one that’s growing quickly. In fact, it’s expected to reach more than $30 billion annually by the year 2027. So, with a clear monopoly in the space, Vertex simply shouldn’t be ignored.
The newest of the company’s CF offerings is Trkiafta, or Kaftrio. The drug is already a blockbuster in the United States and the company is actively securing reimbursement agreements in Europe, gaining steam in that region as well.
The company is also actively working on candidates in several high-value, rare indications like diabetes, sickle cell disease, and beta-thalassemia.
With dominance in the CF space, and promising candidates in several other high-value indications, Vertex Pharmaceuticals has been, and is likely to continue, on an impressive growth trend since its IPO back in 1991.
Affimed NV (NASDAQ: AFMD)
Affimed is by no means a Vertex Pharmaceuticals in terms of scale, but, in my view, the potential growth of this company could mirror or exceed that of Vertex.
Affimed is a clinical-stage biotechnology company that’s focused on the treatment of cancer. However, the company’s method of treatment is unlike anything on the market today. Today’s cancer treatments involve targeting and essentially poisoning cancer cells to kill them, stop their reproduction, and ultimately cure, or extend the life of the patient.
Unfortunately, these drugs damage the human body, with systemic reactions often, making the treatment period a relatively miserable experience and setting the stage for significant adverse events, up to and including death.
Affimed wants to change this. Instead of sending harsh chemicals into the human body, the company is working to tap into the largely untapped potential of the human body’s innate immune system.
The company’s flagship candidate is known as ROCK is a pipeline of innate cell engagers designed to essentially wake up the cells within the innate immune system and target those cells to specific types of hematologic and solid tumor types.
The method of treatment is promising too, with early clinical data surrounding AFM13 resulting in a significant disease reduction in all patients who have received the treatment to date. Moreover, there were no signs of cytokine release or neurotoxicity, giving the treatment a much more favorable safety profile than most treatments on the market today.
With a long pipeline of candidates that are showing promise in the treatment of some of the world’s most difficult-to-treat types of cancer, AFMD is a stock to pay close attention to.
Silo Pharma (OTCMKTS: SILO)
Finally, Silo Pharma is a development stage biotechnology company that comes with significant potential for growth. Like others on this list, the company is working to treat medical conditions with high unmet need, and is doing so in a way that you wouldn’t expect.
While taking advantage of the incredible advancements made in healthcare tech and data, the company is combining the new with the old, taking a play out of the medicine man’s playbook with psychedelic compounds.
For centuries, medicine men have been using psychedelic compounds like psilocybin, found in “magic” mushrooms, to treat conditions like Parkinson’s disease, fibromyalgia, general anxiety disorder (GAD), and even some forms of cancer.
At the same time, the company is attracting massive partners in the development of these therapeutics. Most recently, the company teamed up with the University of Maryland, Baltimore, a highly respected medical school. In fact, the school has a reputation of providing Ivy League-level education and research.
To put a little icing on the cake, the company is well-capitalized and ready to continue moving forward to bring promising therapeutics to several underserved patient populations. All told, this is an opportunity that’s hard to ignore.
The Bottom Line
The bottom line here is simple. Technological innovation and an improved understanding of how the human body works is leading to the development of therapeutics that are extending the length and improving the quality of lives for patients. At the same time, these therapeutics are generating massive profits for the companies that develop them, creating compelling investment opportunities. In my view, the three stocks listed above represent some of the best commercial, clinical, and developmental stage biotech plays on the market today.
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Disclosure: This article was published as the result of a monetary relationship between CNA Finance and Silo Pharma.