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Why You Should Own Biotech Stocks Now

By Taylor Carmichael - Updated Mar 12, 2021 at 9:40AM

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The confluence of healthcare and technology will send many biotech stocks soaring over the next decade.

What is biotech and why do you want to own shares of biotech stocks? Corinne Cardina, bureau chief of healthcare and cannabis at, and Motley Fool contributor Taylor Carmichael define the biotech universe and discuss why you want to invest here. This segment was recorded live on March 5.

Corinne Cardina: Taylor, could you share one thing that investors should know about biotechs and what are their defining characteristics and we'll try to keep it brief so we can start talking about some names.

Taylor Carmichael: Well, to me biotech, what it really is, is technology, it's bringing technology to healthcare and so you think of a company like Moderna (MRNA 2.81%) or BioNTech (BNTX 1.38%) that had this mRNA platform. It's a new form of technology so it enables them to discover drugs quicker so that's the quintessential biotech kind of transition, that you have a new platform, a new form of technology. We've had drug discovery for a long time, but it's getting much more specific and quicker, faster, better. It's improving and we've had biotechs for, I don't know, since Amgen (AMGN 0.71%), I guess, 30 or 40 years. But the real kind of big event in terms of the biotech industry, I think, is sequencing the DNA, the human DNA and that has opened the door to a lot more knowledge and a lot more investing in terms of knowing more, giving drug researchers a map of the human body and being able to say, OK, this is what we want to target. This is what we want to do and we're getting more and more, you are seeing more and more of the kind of the interconnection of technology and tech stocks and healthcare and so you're seeing, you see that with Illumina (ILMN 0.15%), you see with Microsoft running the computers for Adaptive Biotechnologies (ADPT 1.30%). I mean, you just see a lot of high-tech stuff using computers, using artificial intelligence, supplying drug candidates. So that's all a part of biotech now.

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Stocks Mentioned

Amgen Inc. Stock Quote
Amgen Inc.
$249.26 (0.71%) $1.76
Microsoft Corporation Stock Quote
Microsoft Corporation
$260.87 (3.29%) $8.31
Illumina, Inc. Stock Quote
Illumina, Inc.
$243.86 (0.15%) $0.37
Moderna, Inc. Stock Quote
Moderna, Inc.
$140.08 (2.81%) $3.83
Adaptive Biotechnologies Corporation Stock Quote
Adaptive Biotechnologies Corporation
$7.81 (1.30%) $0.10
BioNTech SE Stock Quote
BioNTech SE
$165.25 (1.38%) $2.25

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

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