Biotech stocks can be quite risky, but they can also offer the opportunity for tremendous returns. In this Motley Fool Live video recorded on June 16, Motley Fool contributors Keith Speights and Brian Orelli talk about one biotech stock that investors should really have on their radar right now.

Keith Speights: There are hundreds of biotech stocks on the market, several hundred, way too many for most investors to follow. Is there one biotech stock out of this huge group that you think investors should really have on their radar right now?

Brian Orelli: Yeah. [laughs] You're not kidding when you say there's hundreds of biotechs. It's ridiculous how many biotechs there are and it's really difficult to follow them all. I'm a cheapskate at heart. Biotech is a high-growth industry. Sometimes you just have to hold your nose and invest even though the valuation seem high, but I'm always still looking for a good deal.

On that metric, I think Vertex Pharmaceuticals (VRTX -1.60%), ticker there is VRTX, looks like a good deal. It's 50% lower than its 52-week high. It has had some clinical trial setbacks, but it's still generating a lot of cash flow from its cystic fibrosis drugs, and that cash will give it a lot of optionality to acquire drugs for its pipeline if the drugs that have been developed internally for its pipeline don't pan out.

Speights: Brian, you mentioned clinical trial setbacks. How serious or how significant do you think Vertex's latest setback with its alpha-1 antitrypsin deficiency drug was for the company?

Orelli: I think they've actually had two.

Speights: Yeah, they had two, one recently.

Orelli: Then one maybe last year. I think they were pretty early-stage programs, so I was a little surprised that investors had put so much stake in those drugs. It didn't even have proof-of-concept data yet, so I was surprised that price went down so much. That's probably the main reason why it's added that 50 percent of its 52-week high is probably because of those AATD drugs failing.

I was surprised that there was that much valuation built into Vertex because I didn't think that those drugs had any proof of concept. Maybe just because Vertex has had such great success in cystic fibrosis, maybe investors were just assuming that of course these drugs are going to work, and so they were counting on that in the valuation. But I certainly wasn't [inaudible] it was a decent price even at its 52-week high, and so I definitely like the price here.