Please ensure Javascript is enabled for purposes of website accessibility

These 3 Stocks Have Doubled Investors' Money

By Keith Speights – May 15, 2018 at 6:33AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Actually, they've generated even greater gains -- in just the last 12 months.

Investing in stocks can make you a lot of money over time. The average annual return for the S&P 500 is around 10% before adjusting for inflation. That translates to your money doubling on average every seven years or so over the long run. 

But some stocks don't take nearly that long to double. Three stocks in particular have doubled investors' money -- and more -- in just the last 12 months. Here's why Nektar Therapeutics (NKTR 5.26%), CRISPR Therapeutics (CRSP 1.33%), and Sarepta Therapeutics (SRPT 0.83%) became such huge winners -- and whether or not their impressive momentum can continue.

Smiling man with money raining down on him

Image source: Getty Images.

1. Nektar Therapeutics

Nektar Therapeutics' stock price has quadrupled over the last 12 months. The biotech's big run began in earnest last November when Nektar announced that it had received a $150 million up-front payment from Eli Lilly for licensing NKTR-358, an autoimmune-disease therapy that's now in a phase 1 clinical study.

That was just the beginning of Nektar's good news. The company announced plans to file for FDA approval of pain drug NKTR-181, a mu-opioid receptor agonist that doesn't have some of the downsides of commonly used opioids. Nektar followed that announcement with great results from a phase 1/2 study that demonstrated the potential for experimental drug NKTR-214 to stimulate the body's immune cells to fight cancer and help other immunotherapies work better in killing cancer cells. 

This success for NKTR-214 led to a huge deal with Bristol-Myers Squibb. In February, the big drugmaker announced that it was paying Nektar $1 billion in cash and buying a stake in the biotech, valued at the time at $850 million, to partner on development and commercialization of NKTR-214.

Nektar has given up some of its massive gains since early April. The biotech now claims a market cap of around $14 billion, which reflects high expectations for its promising pipeline candidates. I expect that Nektar could regain its momentum, though, with positive clinical data later this year and FDA approval for NKTR-181.

2. CRISPR Therapeutics

CRISPR Therapeutics' stock price has more than tripled over the last 12 months. Most of those gains came in the first quarter of 2018. There were three primary catalysts for CRISPR.

First, it develops gene-editing therapies with CRISPR-Cas9, which uses a bacterial enzyme to cut DNA. There have been some issues raised about use of the CRISPR-Cas9 method for gene editing in humans. However, a January article in The Wall Street Journal revealed that Chinese scientists have used CRISPR-Cas9 in humans for several years. This news caused gene-editing stocks like CRISPR Therapeutics to enjoy a nice boost.

Second, big drugmakers have become quite interested in the use of gene editing. There has been some speculation that CRISPR Therapeutics and other biotechs focused on gene editing could attract more deals from partners with deep pockets. CRISPR Therapeutics already has a partnership with Vertex Pharmaceuticals to develop lead candidate CTX-001.

Third, CRISPR Therapeutics and Vertex are moving quickly to advance CTX-001 to clinical testing in humans. The two partners plan to initiate a phase 1/2 clinical trial to evaluate the gene-editing therapy in rare blood disorder beta-thalassemia in the second half of this year. They're also on track to begin clinical testing of CTX-001 in treating sickle cell disease this year.

Can CRISPR Therapeutics stock go even higher? I think so. Over the long run, the potential for CRISPR-Cas9 gene-editing therapies is enormous. 

3. Sarepta Therapeutics

Sarepta Therapeutics stock has soared more than 170% over the last 12 months. The trend line for the biotech stock has pointed upward throughout much of the period thanks to the better-than-expected commercial launch of Duchenne muscular dystrophy (DMD) therapy eteplirsen, branded as Exondys 51 in the U.S.

Eteplirsen won a controversial FDA approval in 2016. However, the drug has enjoyed strong demand -- which makes sense because there are no other approved therapies for DMD, a rare genetic disease that causes muscular weakness and primarily impacts young boys.

Sarepta did encounter a major setback for eteplirsen, with the European Committee for Medicinal Products for Human Use (CHMP) recommending against approval for the drug. The biotech plans to file for reexamination of eteplirsen, and it will request that a scientific advisory group made up of DMD and neuromuscular specialists be convened to dig into the merits of the clinical data for eteplirsen. 

In the meantime, Sarepta is moving forward with other pipeline candidates. The company plans to complete a rolling submission by the end of 2018 for FDA accelerated approval of golodirsen in treating patients with DMD amenable to skipping exon 53. Sarepta also announced a partnership with Myonexus Therapeutics to develop gene therapies for various forms of Limb-girdle muscular dystrophies. 

There's a lot of anticipated success baked into the share price for Sarepta. While the stock could move even higher, I wouldn't be surprised if Sarepta's momentum slows down.

A common denominator

All three of these stocks have at least one common denominator: They're all biotechs. Biotech stocks can generate huge returns. But they also have huge risks.

Any time the risks are lowered, biotech stock prices take off. That's what happened with Nektar, CRISPR Therapeutics, and Sarepta. All three of these stocks, though, still have plenty of risks. And if any of those risks appear to increase significantly, the stocks can go down just as quickly as they went up.

Keith Speights owns shares of Vertex Pharmaceuticals. The Motley Fool owns shares of CRISPR Therapeutics. The Motley Fool recommends Vertex Pharmaceuticals. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Sarepta Therapeutics, Inc. Stock Quote
Sarepta Therapeutics, Inc.
$110.54 (0.83%) $0.91
Nektar Therapeutics Stock Quote
Nektar Therapeutics
$3.20 (5.26%) $0.16
CRISPR Therapeutics Stock Quote
CRISPR Therapeutics
$65.35 (1.33%) $0.86

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 10/02/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.