When you think of biotech stocks, "cheap" is probably the last word that comes to mind.

Most biotech stocks aren't profitable, and many have no products currently on pharmacy shelves. This means biotech valuations tend to be a hodgepodge of investor emotions, future peak sales expectations, and clinical data. Proving that a biotech stock is "cheap" based on this cauldron of factors can be veritably impossible.

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However, there are instances where fundamental investors can put their nose to the grindstone and analyze profitable biotech companies to potentially uncover "cheap" stocks. Though much of the industry is valued at a premium, four biotech stocks stand out for their relative cheapness based on the PEG ratio, or price/earnings-to-growth ratio.

Why the PEG ratio? Instead of just looking at something as simplistic as the P/E ratio, the PEG ratio factors in future growth prospects as they relate to a company's current P/E. Generally speaking, a PEG around 1 or below 1 would be considered inexpensive, while a PEG above 2 normally represents a fully valued, or perhaps even richly priced stock.

All four of the following biotech stocks have PEG ratios that are currently below 1, making them among the cheapest biotech stocks in the world.

1. Celgene: PEG of 0.79

It's amazing to think a biotech blue-chip stock with a $93 billion valuation could still be considered cheap, but Celgene (NASDAQ:CELG) isn't your run-of-the-mill drug developer.

Forming the foundation of Celgene's growth is Revlimid, a drug designed to treat multiple myeloma and a host of other blood cancers. Revlimid has regularly been growing by 15% to 20% per year, and Celgene's full-year forecast calls for $8 billion to $8.3 billion in 2017 sales. This represents a little more than 60% of Celgene's total sales. Longer duration of use, strong pricing power, and label expansion opportunities are behind Revlimid's growth.

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Best of all, Celgene struck a deal in December 2015 with generic drug developers that'll keep most of them off the market until the end of January 2026. In other words, it's smooth sailing for Celgene and its lead drug for roughly the next decade.

Beyond Revlimid, Celgene is counting on acquisitions, collaborations, and organic drug development to play their part. Its buyout of Receptos for $7.2 billion in 2015 gave the company access to an experimental multiple sclerosis and ulcerative colitis drug known as ozanimod. At its peak, if approved, ozanimod could generate $4 billion in annual sales. Likewise, the organic development of oral anti-inflammatory Otezla, along with label expansion opportunities, could easily push sales well past $2.5 billion annually.

A double-digit growth rate and shrinking P/E give investors every reason to take a closer look at this biotech blue chip.

2. Jazz Pharmaceuticals: PEG of 0.80

Biotech stocks with a focus on specialized medicines are among those that can surprise investors with their consistent growth rates. Ireland-based Jazz Pharmaceuticals (NASDAQ:JAZZ) is one such company with a PEG of 0.8 -- and the expectation from Wall Street that sales could grow by 60% to nearly $2.4 billion between 2016 and 2020.

At the core of Jazz's growth is Xyrem, a drug designed to treat narcolepsy. There's been serious concern for years that generic drug producers would threaten Xyrem, but Jazz has made progress by settling with at least one generic drugmaker recently. With Xyrem's outlook beginning to clear, the company can rely on both volume growth and pricing power to push Xyrem's sales higher. In the recently reported first quarter, Xyrem tallied $272.3 million in sales, a 9% year-over-year improvement. It also put the drug on track to generate more than $1 billion in sales this year.

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Like Celgene, Jazz is pretty reliant on a single drug for a majority of its sales, but it's looking to change that. Aside from focusing on building a physician and patient base for Defitelio, a treatment for severe hepatic veno-occlusive disease, which saw sales double in Q1 to $35.9 million from the year prior, Jazz is looking to its pipeline to do the talking.

In April, the company completed a rolling new drug application submission for vyxeos as a treatment for acute myeloid leukemia. Vyxeos was a drug being developed by Celator Pharmaceuticals that Jazz acquired for $1.5 billion last year. At its peak, and assuming a broader application of vyxeos as an AML treatment, sales could approach $750 million annually.

Jazz also announced positive phase 3 results for JZP-110, a treatment for excessive sleepiness associated with narcolepsy, in April. Peak sales of JZP-110 have been rumored as high as $500 million annually.

With portfolio diversification underway and Xyrem having a clear path for the time being, Jazz is looking awfully cheap.

3. ANI Pharmaceuticals: PEG of 0.94

Hint, hint...another specialty drug developer is on the list. ANI Pharmaceuticals (NASDAQ:ANIP) is a lesser-known hybrid drug company that develops and markets both branded and generic drugs. ANI is able to get the best of both worlds by reveling in the high margins of branded therapies, as well as the growing prescription usage and low-cost production of generic medicines.

When looked at as a whole, a majority of ANI's growth has recently come from the generic side of the equation. This is a smart move considering the rising price of branded therapies and threats from President Trump to bring down U.S. drug prices. In its recently reported first quarter, generic drugs sales doubled to $26.6 million.

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Inclusive of its branded therapeutics, which also registered 44% sales growth from Q1 2016 to $8 million, ANI ended the first quarter with a pipeline of 76 drugs. The company's press release points out that 53 of these 76 products were acquired, and 46 of these 53 should be easily commercialized. In other words, a small army of generic drugs could be hitting pharmacy shelves over the next couple of years, and there's minimal concern of regulatory red tape holding them up.

The addition of numerous generic and/or branded therapies over the next couple of years is expected to catapult ANI Pharmaceuticals' sales from a reported $129 million in 2016 to $347 million by 2019. Meanwhile, its EPS is expected to nearly double to more than $7 per share during the same timeframe.

This may be an under-the-radar drug stock, but it's awfully cheap.

4. Corcept Therapeutics: PEG of 0.67

Last, but certainly not least, is Corcept Therapeutics (NASDAQ:CORT), the cheapest biotech stock of the bunch with a PEG ratio of just 0.67, and also a developer of specialty medicines.

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However, there is a pretty good reason Corcept may be so cheap: It's wholly reliant on growth from Korlym, a Cushing's syndrome drug. It has no other approved therapies. During the first quarter, which Corcept reported a little over a week ago, product sales increased by 72% year over year to $27.6 million. The company also increased its 2017 sales guidance to a fresh range of $125 million to $135 million after generating just $81 million in sales last year. By 2020, Wall Street is looking for $209 million in total sales. Corcept has pushed through the initial slow uptake of its lone drug, but peak annual sales could eventually top the $300 million mark.

The big question at this point is if Corcept can push beyond Korlym and diversify its product portfolio and pipeline. Corcept is working on a laundry list of discovery-stage research involving Korlym and its other glucocorticoid antagonists. These include studies into treating breast cancer in combination with a chemotherapeutic agent, muscular dystrophy, and Alzheimer's disease, to name a few. Clinical research is ongoing to expand Korlym's label to possibly include post-traumatic stress disorder, alcohol dependence, and possibly in combination with anti-cancer agents for prostate, ovarian, and breast cancer.

While there's plenty of hope surrounding Korlym, and Corcept should remain healthfully profitable as a result of its lead drug, it still has a ways to go to shake its reputation of being a one-trick pony.

Sean Williams has no position in any stocks mentioned. The Motley Fool owns shares of and recommends Celgene. The Motley Fool has a disclosure policy.