Looking for stocks that can remain relevant and successful over 10 years or more? The healthcare industry is a great place to start. Everyone will need some form of healthcare, be it sophisticated medical devices or lifesaving drugs. But the mere presence in this industry does not make a specific company worth investing in today.
Drugmakers must continue innovating and developing newer and better therapies to stay on par with the competition and generate growing revenue and profits. Let's examine two biotechs that seem to be able to do that: Gilead Sciences (GILD 0.51%) and CRISPR Therapeutics (CRSP 1.44%).
1. Gilead Sciences
Gilead Sciences is a leader in the market for HIV drugs although the company has recently faced some headwinds in this space. HIV screenings and diagnostics decreased during the pandemic. Some of Gilead's products have also been facing generic competition. Thankfully, these issues seem to be short-term problems.
The pandemic isn't over yet, but it won't last forever (hopefully). As it subsides, expect Gilead's HIV portfolio to bounce back. Medicines such as Descovy and Biktarvy continue to perform well for the company. During the second quarter, sales of Biktarvy jumped by 28.2% year over year to $2.6 billion.
This HIV therapy ended the period with a leading 44% share of the U.S. HIV market, 4% higher than the year-ago period. Descovy's sales came in at $460 million, 5.7% higher than the prior-year quarter. Beyond HIV, Gilead Sciences' Hepatitis C Virus (HCV) portfolio seems to be struggling. In the second quarter, sales from this segment dropped by 18% year over year to $448 million, partly due to lower patient starts.
However, Gilead Sciences maintained a market share between 50% and 60% in this space during the second quarter.
Gilead Sciences has a rich lineup that will help replace its struggling products. In HIV, the biotech recently earned approval for Sunlenca in Europe. Sunlenca is the first six-month, long-acting HIV regimen to be approved, and it is almost guaranteed to generate strong sales for many years to come. It has yet to earn the green light in the U.S. Regulators in the country declined to approve it due to manufacturing issues.
But Gilead Sciences seems to have worked things out with regulators in the U.S. It resubmitted an application during the second quarter; approval should hopefully come relatively soon. The biotech has many other HIV programs in the works, including potential cures for the disease. It is also looking to make a stronger push within oncology.
The company has a long and proven history of innovation, and it generates enough funds to invest in new and promising clinical compounds. Gilead Sciences recently spent $405 million in cash to acquire MiroBio, a U.K.-based privately held biotech company that focuses on inflammatory illnesses. Gilead Sciences' excellent track record, strong pipeline, and robust dividend profile together constitute strong reasons to hold onto its shares for years.
2. CRISPR Therapeutics
CRISPR Therapeutics isn't as well-established as some of the larger biotechs. The company currently has no therapies on the market. But the future could be bright for the gene-editing-focused drugmaker. CRISPR is looking to develop innovative medicines, sometimes for rare diseases with few treatment options. Its most advanced candidate is exa-cel, which targets a duo of blood disorders called transfusion-dependent beta-thalassemia (TDT) and sickle cell disease (SCD).
CRISPR Therapeutics is working on these programs with Vertex Pharmaceuticals. Exa-cel has, so far, impressed in clinical trials. It has been able to eliminate or, at the very least, substantially decrease the constant need for transfusions in all TDT patients studied. It has also substantially reduced the occurrence of vaso-occlusive crises (painful side effects of SCD) in all patients treated.
On Sept. 27, CRISPR Therapeutics and Vertex Pharmaceuticals announced they would initiate rolling submissions for exa-cel in the U.S. for the treatment of SCD and TDT in November; these submissions should be completed by the first quarter of 2023. In Europe, the two partners expect to complete regulatory submissions by the end of the year.
This groundbreaking therapy could earn approval in the U.S. and Europe by September 2023. CRISPR Therapeutics has already received upfront payments for exa-cel from Vertex, and moving forward, the partners will share the profits and costs associated with it on a 60/40 basis, where CRISPR Therapeutics will incur 40% of the costs and pocket 40% of the profits.
The biotech is working on several other candidates, including some that target various forms of cancer and type 1 diabetes, among others. CRISPR Therapeutics does not have the pedigree of a biotech giant like Gilead Sciences. But it is demonstrating that its approach can unlock innovative treatments. It will take time, but CRISPR Therapeutics has the tools to become a major player in the biotech industry.
