Don't think the slump for biotech stocks that began last year will go on forever. Of course, not all biotechs experienced the doldrums in the first place. But many of the stocks that did should be in a good position to rebound in the not-too-distant future.

We asked three Motley Fool contributors to identify the biotech stocks they think are great picks for investors to buy in February. Here's why they chose Gilead Sciences (GILD -0.67%), Novavax (NVAX -1.77%), and Vertex Pharmaceuticals (VRTX -1.86%).

A scientist in a lab looking at something next to a microscope.

Image source: Getty Images.

Don't overlook this big biotech's long-term prospects

David Jagielski (Gilead Sciences): This month is a good time to buy up shares of drugmaker Gilead. The stock is near its 52-week lows as it has fallen around 14% since the start of this year (the S&P 500 has declined by 7%) amid some discouraging quarterly numbers. Admittedly, the company didn't have a great performance in the last three months of 2021 as its net sales of $7.2 billion in the fourth quarter were down 2% from the same period a year earlier.

But for long-term investors, there are some exciting catalysts ahead for the business. Gilead's lenacapavir would allow people with HIV to take a twice-yearly injectable, as opposed to daily pills. The company said on its earnings call that it expects the U.S. Food and Drug Administration (FDA), which is currently reviewing the drug, to make a decision on it in the first half of this year. A favorable decision for the company could instantly send its shares soaring on what could be a game-changing treatment for many HIV patients.

Gilead is also looking to be more than just an HIV company. Today, the bulk of the business centers around HIV drugs, which in 2021 accounted for three-quarters of its sales (excluding revenue from Gilead's COVID-19 treatment, Veklury).

The company is pivoting more toward oncology and it currently has more than two dozen trials ongoing in that area, with several of them in phase 3 testing. Among its most promising drugs is Trodelvy, which treats multiple cancers. In 2021 (its first full year on the market), Trodelvy generated $380 million in sales, which is nearly eight times more than it did a year earlier. At its peak, the drug is projected to generate revenue of close to $5 billion.

Gilead has plenty of growth potential in the future, and that makes it an attractive buy right now. It also pays investors a generous dividend yield of 4.6%. This big biotech stock appears to be an underrated investment that you can hang on to for the long haul.

It could be a great year for this biotech

Prosper Junior Bakiny (Novavax): Biotech company Novavax fell behind the leaders in the coronavirus vaccine race. That was in part due to manufacturing issues that led the company to delay regulatory filings for its lead candidate. However, Novavax has finally completed its Emergency Use Authorization (EUA) application in the U.S. It has also earned EUA in many other regulatory jurisdictions, notably including the European Union.

There remains a dire need for effective vaccines against COVID-19. Although the surge in cases due to the omicron variant seems to be fading, don't be surprised if another variant of the SARS-CoV-2 virus that causes the disease emerges. Novavax's coronavirus tailwind is far from over. The company will be handsomely rewarded for its work in this area. Analysts expect Novavax to record $4.94 billion in revenue in 2022, along with earnings per share of $29.31. That would be a substantial improvement over the previous year.

Once Novavax records green on the bottom line, expect the market to react positively. The company is also setting itself up for the future. It has a flu vaccine for adults age 65 and older that has already proven effective in a late-stage clinical trial in which it was pitted against one of the market's leaders.

Meanwhile, Novavax has several other candidates that will gradually progress through its pipeline thanks to the windfall it will experience as a result of its successful attempt to develop an effective COVID-19 vaccine. All of this bodes well for Novavax's future.

Considering the company has lost more than half its value in the past six months alone, now looks like a great time to open a position. Novavax may continue to suffer in the next couple of months, but those who see beyond these near-term issues should be rewarded down the road. 

Ready to shift into higher gear

Keith Speights (Vertex Pharmaceuticals): Some biotechs stay stuck in first gear because they just can't manage to achieve commercial success. Others make it to second gear, with success in one area, but never expand into additional therapeutic categories.

However, a select few biotechs establish dominance in one indication and then go on to become juggernauts in other areas. Vertex Pharmaceuticals appears to be ready to shift into that higher gear.

Vertex already commands a monopoly in treating the underlying cause of rare genetic disease cystic fibrosis (CF). The company still has plenty of room for growth in the CF market by winning approvals for younger age groups and by securing additional reimbursement deals. But Vertex isn't just limiting its sights to CF.

The company and its partner, CRISPR Therapeutics, plan to file for regulatory approvals of CTX001 in treating beta-thalassemia and sickle cell disease later this year. CTX001 could add another non-CF blockbuster to Vertex's lineup.

Vertex is also advancing experimental drug VX-147 into late-stage testing in treating APOL1-mediated kidney disease. Chief Operating Officer Stuart Arbuckle said in the company's fourth-quarter conference call that VX-147 "represents a multibillion-dollar opportunity" for Vertex.

And there's more. Vertex expects to soon report results from a phase 2 study of VX-548 in treating acute pain. The company also has high hopes for its type 1 diabetes program and believes that it could have a functional cure for the disease on the way.

Vertex's shares currently trade at only 16.5 times expected earnings. With its tremendous growth prospects in CF and other indications, this stock could be a massive winner over the next few years.