Some pastimes require a lot of upfront money. That's not the case with investing, though. You don't need a huge amount of cash to get started.

That's especially true if you're investing in biotech stocks. There are hundreds of stocks available at relatively low share prices. You could get several great biotech stocks with an initial amount of $500 or less.

However, that presents another problem: Which ones should you buy? Different investors will have different opinions, of course. Here are my picks for the best biotech stocks to buy with $500 right now.

Gloved hand holding a glass beaker with a $100 bill in it and several $100 bills beneath it.

Image source: Getty Images.

Vertex Pharmaceuticals

You can pick up one share of Vertex Pharmaceuticals (VRTX 1.25%) for a little around $208. With Vertex, you'll get a biotech with a monopoly in one important indication, multiple pipeline candidates targeting other indications, and huge profits.

That monopoly is in treating the underlying cause of cystic fibrosis (CF). Vertex's four approved CF drugs have put the company in an enviable financial position, with a massive cash position of $6.1 billion as of March 31, 2021.

The big biotech is evaluating several experimental drugs in phase 2 clinical studies that target diseases other than CF. It also has promising early stage candidates that could effectively cure rare blood diseases beta-thalassemia and sickle cell disease and a not-so-rare disease -- type 1 diabetes. Vertex only needs one of these programs to be successful to keep its tremendous momentum going.

Novavax

Another $148 or so will snag you a share of Novavax (NVAX 5.30%). The company is kind of the Cinderella story of the COVID-19 vaccine race, coming out of nowhere to claim a spot among much larger drugmakers. Its NVX-CoV2373 vaccine has proven to be highly effective in late-stage studies. Novavax expects to file for authorizations of its COVID-19 vaccine in the U.S., U.K., and Europe in the third quarter.

So far, Novavax has scored supply deals totaling around 300 million doses plus 1.1 billion doses to be supplied to developing countries. It's hoping to advance variant-specific COVID-19 vaccines into clinical testing this year.  The biotech is also arguably in the best competitive position to develop a successful flu/COVID-19 combo vaccine.

Novavax's market cap currently stands at close to $11 billion. With the tremendous potential for its vaccine pipeline, this biotech stock could be worth a lot more in the not-too-distant future.

Fate Therapeutics

Fate Therapeutics (FATE -1.35%) currently trades at around $77 per share. Cathie Wood has been busy buying this biotech stock for a couple of her ARK Invest exchange-traded funds (ETFs). She undoubtedly likes Fate's promising pipeline.

The company is developing "off-the-shelf" cellular immunotherapies targeting cancer and immune disorders. Fate announced encouraging results from phase 1 studies of two of its clinical programs in December and reported more good news from another phase 1 study in May. 

It's still really early for Fate's pipeline candidates, which makes this biotech stock significantly riskier than Vertex or Novavax. However, I think this high-risk, potentially high-reward stock is worthy of consideration.

Ionis Pharmaceuticals

After buying the previous three biotech stocks, you'd have close to $67 remaining from your initial $500. There's a boatload of stocks from which to choose, several of which would be good picks. However, I think going with a biotech that gives you the most shots on goal makes sense. That's why my final selection is Ionis Pharmaceuticals (IONS 1.69%), which currently trades for less than $40 per share.

Ionis already has three approved products on the market. Spinal muscular atrophy drug Spinraza, which is licensed to Biogen, is the biggest commercial success story of the group so far. 

The main reason to check out Ionis, though, is for its pipeline. The company has seven late-stage programs, 25 phase 2 programs, and six phase 1 programs, all of which are based on its antisense technology. Ionis is in a position to have at least a dozen products on the market within the next five years. With its market cap at around $5.3 billion, I think this biotech stock provides an attractive risk-reward profile.