With long-term investing, time is on your side. There is beauty in the fact that you can ignore the short-term market gyrations and instead focus on quality companies in growing markets. While some biotechs can be risky, not all are dependent upon clinical trial outcomes.
That's why I want to take a closer look at Repligen (RGEN 0.22%) and Exact Sciences (EXAS 2.38%). One develops tools for the industry, while the other is focused on cancer diagnostics. These companies have blossomed over the last decade and generated significant shareholder value in the process. With proven technologies in growing markets and expanding product lines, investors can likely expect continued market-beating returns.
Repligen
Don't want to miss out on the cell and gene therapy revolution, but also don't want to be at the whims of regulators or clinical trials? Repligen, the self-proclaimed engine for the research and development of next-generation products, might be right for you. This biotech sells the instruments and associated disposables that are needed for the production of cutting-edge therapies. From monoclonal antibodies to cell and gene therapy, to COVID-19-related vaccines and treatments, Repligen is an agnostic supplier of mission-critical products to the biotech industry.
Repligen has multiple product lines aimed at the spectrum of drug development, from cell culture to scalable purification, to chromatography and process analytics. And despite $1.1 billion in revenue in fiscal 2021, it still has room to grow, with just 8% of the overall market share. And as cell and gene therapy become increasingly complex, Repligen's addressable market only stands to increase.
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It's guiding for revenue growth of 19% to 24% for FY 2022, yet down 40% from its all-time high in September 2021, so now seems like a great time to add shares.
This biotech has shown an ability to grow over time -- up over 430% over the last five years compared to an increase of just over 90% for the S&P 500 during the same period. Plus, it is a top dog in the important and emerging field of cell and gene therapy. And as it is an agnostic supplier to the industry, you can sleep well at night knowing that no matter which company succeeds in the gene therapy market, Repligen will likely prosper too.
Exact Sciences
Best-known for its non-invasive colorectal cancer screening tool Cologuard, Exact Sciences has proven itself as a market beater too. Up 620% over the last decade compared to 220% for the S&P 500, Exact Sciences has trounced the market. And despite being cut in half since its February 2021 all-time highs, now could be an excellent entry point to own shares of a great company.
Its screening services division, anchored by Cologuard, continues to thrive. Hauling in revenues of $1.062 billion in 2021 and guiding for $1.34 billion to $1.367 in 2022, the service line is cruising. Plus, the company is starting to generate repeat business, with over $100 million in revenue from repeat Cologuard screening in 2021. All in all, Exact Sciences continues to chip away at the massive colorectal cancer screening market, which it estimates is worth $18 billion in the U.S. alone.
There are other levers to pull too. Its precision oncology segment is guiding for $595 million to $610 million in 2022, up about 9% from 2021. The $13.3 billion molecular diagnostics company is also developing blood tests for colorectal cancer screening -- which would provide another option for the 46 million unscreened patients in the U.S. alone.
It is also working on blood tests for the early detection of multiple cancers via a single blood draw. It will likely compete with Guardant Health and Illumina's GRAIL -- but in a $25 billion market, there is plenty of room for multiple players.
Lastly, it believes its blood test for liver cancer screening that launched late last year, dubbed Oncoguard TM Liver, is a $1.5 billion-dollar addressable market. It does not having insurance approval yet, but as Oncoguard TM Liver continues to generate more data, reimbursement will likely follow. Put it all together and Exact Sciences looks like a bargain with plenty of growth opportunities.
