Do you have a $50 bill burning a hole in your pocket, or your brokerage account? It might not be enough to fill up an empty gas tank but you'd be surprised what a patient investor can do with such a tiny sum.
Right now, there are three great healthcare stocks with prices that add up to a little less than $50. Here's why they could deliver eye-popping gains for patient investors.
1. Ocular Therapeutix
Chronic eye soreness is a problem for at least one in 10 Americans and they're clamoring for better treatment options. Eyedrops can soothe those eyeballs, but they aren't much help when patients are sleeping or too busy to apply them.
Dextenza from Ocular Therapeutix (OCUL 1.89%) is a tiny drug-eluting device that does the job for 30 days after a healthcare provider slides it into a tear duct. A month later, the insert safely melts away. By providing a steady dose of anti-inflammation medication every minute of every day for a whole month, Dextenza has a big advantage over eyedrops.
Until recently, Dextenza was limited to the post-surgical setting. This has severely limited sales because these patients don't provide much repeat business.
Recently, the FDA expanded Dextenza's addressable patient population to include allergic conjunctivitis. This is essentially a chronic case of non-contagious pink eye that affects an estimated 3 million Americans.
Sales of Dextenza have plodded along since its first approval in late 2018. With a much larger addressable population that now includes patients who receive Dextenza month after month, sales could shoot through the roof.
Programming living cells that can create high-value ingredients has gotten a lot easier in recent years. As a result, synthetic biology start-ups keep popping up left and right. Amyris (AMRS -2.86%) is the oldest and most successful member of the burgeoning synthetic biology industry.
Amyris shares are trading at the low cost of just $13 per share at recent prices and it's got lots of room to run higher. The company has 13 ingredients in commercial-stage production plus another 24 in development.
Amyris' most successful product to date is squalane, the key moisturizing ingredient in its successful line of Biossance health and beauty products. Amyris is the first synthetic biology company to produce a potent cannabinoid called CBG in a big fermentation vat. With CBG from Amyris, manufacturers can make a product many times more potent than the weak cannabis-derived CBD lotions that many consumers find disappointing.
Companies like Zymergen and Ginko Bioworks have raised billions from investors. Neither of these start-ups has ever produced anything at scale yet. With this in mind, their chance of catching up to Amyris in the foreseeable future is pretty slim.
There aren't many fermentation vats large enough to make synthetic biology a lucrative venture. Employees with the skills to run a facility full of this highly specialized equipment are even harder to find.
Amyris expects annual revenue to more than double in 2021 to $400 million. Despite investing heavily in its future, the company expects to report positive earnings before interest, taxes, depreciation, and amortization (EBITDA) this year. With this gigantic lead over competitors who don't even have gross profits to report, this stock could soar over the long run.
You might not realize it, but chronic kidney disease is strangling healthcare systems in the U.S. and other developed nations. Renalytix (RNLX 3.10%) is using diagnostics and artificial intelligence to help healthcare providers decide which patients need attention now to avoid progressing from simple kidney disease to kidney failure.
Coordinating care for kidney disease patients might not seem like a big deal, but most adults with kidney problems don't find out until they require dialysis. There are an estimated 37 million CKD patients in the U.S. so even small improvements can save billions for big health insurance companies and government payers.
Renalytix is currently launching its diagnostic service, called KidneyIntelX in Veterans Health Administration (VHA) hospitals. The VHA operates 1,293 healthcare facilities that serve around 9 million veterans annually.
The VHA will use KidneyIntelX to identify diabetic kidney disease (DKD). This condition is present in 0.5 million or 1.0 million veterans depending on how you define DKD and most aren't even aware they have a progressive condition.
Treating veterans with DKD costs the VHA more than $20 billion annually. By keeping more veterans' kidneys from worsening, KidneyIntelX could save taxpayers billions. It could also earn a bundle for its shareholders in the process.