Although biotech stocks have collectively stubbed their proverbial toe over the politically charged drug pricing debate in the U.S. of late, investors shouldn't dismiss these equities out of hand. Biotech, after all, remains well positioned to produce market-beating returns on capital for investors over the next decade.

Armed with this insight, we asked three Motley Fool contributors which biotech stocks they think are worth buying right now. They picked Gilead Sciences (NASDAQ:GILD)Alexion Pharmaceuticals (NASDAQ:ALXN), and Intercept Pharmaceuticals (NASDAQ:ICPT). Here's why.

A cancer cell floating in a dark bluish fluid.

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The dawn of a new era of growth

George Budwell (Gilead Sciences): It's been a moment since biotech heavyweight Gilead Sciences could be considered as a strong buy. After all, the company's hepatitis C franchise literally fell off a cliff after peaking in mid-2016; its pipeline outside of HIV hasn't produced anything you could call a viable growth product in several years; and the company arguably grossly overpaid for Kite Pharma's adoptive cell therapy portfolio. However, Gilead's factory of sadness may be about to close shop for good.

Why should investors circle back to this fallen star of the biotech world? Three reasons. First up, the biotech's newly minted CEO Daniel O'Day appears eager to get the balling rolling on some much-needed business development activity. As a well thought out tuck-in acquisition could amp up the biotech's growth engine in a big way, investors will definitely want to keep an eye on this developing story line.  

Next up, Gilead may have hit the jackpot with its immunology partnership with Galapagos N.V.. The duo's experimental anti-inflammatory candidate filgotinib seems to have what it takes to be a real needle mover in terms of revenue growth. That's great news for Gilead and its shareholders, especially in light of the biotech's rather lengthy drought on the non-HIV pipeline front over the past several years. 

Finally, Gilead's new HIV medicine Biktarvy has been quite literally crushing the competition since its launch. While this development isn't totally unexpected, there were some pre-launch concerns that rival medications may dampen Biktarvy's commercial opportunity. That concern has fallen by the wayside following the drug's record-breaking commercial launch

All told, Gilead's top notch financial capacity for M&A, new executive leadership, and rapidly improving outlook make this biotech a worthwhile addition to any portfolio right now.  

An orphan-disease juggernaut

Keith Speights (Alexion Pharmaceuticals): There was a successful business book years ago titled Blue Ocean Strategy. The main point of the book was that companies can often achieve the greatest success in new, uncontested markets. In the world of healthcare, there are few "blue ocean" kinds of markets like orphan diseases. And Alexion Pharmaceuticals is an orphan disease juggernaut.

If you're not familiar with orphan diseases, they're conditions that affect very few patients. Because they're rare, many orphan diseases don't have any approved therapies. That was the case for rare genetic disease paroxysmal nocturnal hemoglobinuria (PNH) until Alexion's Soliris won FDA approval in 2007. The biotech followed up with two other approvals for the drug later in treating atypical hemolytic uremic syndrome (aHUS) and generalized myasthenia gravis (gMG).

Those approvals allowed Alexion to swim alone in its own blue ocean. And the company made billions of dollars along the way. But now Alexion has an even better drug for treating PNH than Soliris. Ultomiris won FDA approval last December and was ranked by market researcher EvaluatePharma as the top new drug launch of 2019. Alexion also hopes to pick up another FDA approval for the drug in treating aHUS later this year.

Thanks in large part to the tremendous promise for Ultomiris, Alexion's shares trade at less than 12 times expected earnings. Wall Street analysts project that the biotech will increase earnings by more than 14% annually over the next five years. Those estimates seem very achievable and make Alexion a great biotech stock you can buy right now.

A clear path to success 

Sean Williams (Intercept Pharmaceuticals): If you've chosen not to "sell in May and go away," then liver disease drug developer Intercept Pharmaceuticals is the biotech stock you should be focusing on.

As a shareholder, I can admit firsthand that it's been a rough ride in recent months. The company reported its long-awaited Regenerate phase 3 trial data in mid-February, which showed that lead drug Ocaliva met one of its two co-primary endpoints (a reduction in liver fibrosis) in patients with nonalcoholic steatohepatitis (NASH), a liver disease that could impact as many as 5% of U.S. adults. It also demonstrated a positive, but nonstatistically significant, trend in NASH resolution relative to the placebo.

However, the highest and most effective dose (25 mg) also came with high occurrences of pruritus (itching), which occurred in 51% of patients. Bouts of severe itching wound up leading 9% of the high-dose patients to discontinue treatment, which has led to all sorts of safety concern debates surrounding Ocaliva. Compound these safety concerns with a recent dilutive share offering totaling $200 million, and it's easy to understand why Intercept has been under pressure.

But what pessimists seem to be ignoring is the fact that other NASH treatments have failed, and there's currently no Food and Drug Administration (FDA)-approved treatment for NASH. That gives Intercept a pretty clear runway to be the only approved treatment for perhaps a few months to a few years. Even if physicians choose to focus on smaller subsets of NASH patients, the opportunity at $35 billion is large enough that Intercept can thrive.

Additionally, don't overlook that Ocaliva is already approved to treat primary biliary cholangitis (PBC). Even though PBC probably won't generate more than $300 million in peak annual sales, the important aspect is that the FDA's approval in this indication should help pave the way for a label expansion into NASH without safety concerns being much of an impediment.

Some on Wall Street project as much as $2 billion in peak annual sales from Ocaliva. But even if Intercept's lead drug commands only $1 billion a year, it would be a bargain with a current valuation of $2.8 billion.