Biotech stocks make a great addition to your portfolio at any time. They offer you innovation and, often, huge growth prospects over the long haul. But a biotech company can be particularly interesting as that company gets closer to the finish line with a potential product -- or has recently launched a new one.
Right now, two of my favorite biotech companies fit the bill. At the same time, they're trading for bargain prices. That makes them excellent biotech stocks to buy right now in April -- and set yourself up for a long-term win. Let's take a look at these two great additions to any healthcare portfolio.
1. Axsome Therapeutics
Axsome Therapeutics (AXSM 0.82%) beat the bear market last year. That's after the biotech launched its first two products. First, it rolled out the sleep-disorder drug Sunosi, which it acquired from Jazz Pharmaceuticals. Later in the year, it won regulatory approval for an antidepressant named Auvelity. Each drug could reach peak sales of more than $1 billion, according to analyst and company forecasts.
Since then, Axsome shares have given back some of their gains. In fact, this year, the stock has slipped 20%. But I don't see this as a turnaround in sentiment. Instead, it's a great opportunity to buy the stock on the dip. Axsome has just started selling Sunosi and Auvelity -- so there's plenty of opportunity for revenue growth ahead.
Last year, Sunosi prescriptions rose 21% compared with the previous year. And Auvelity's launch suggests "strong adoption from prescribers and patients," the company says.
Meanwhile, Axsome is preparing to resubmit its migraine candidate to regulators in the second half of this year. Axsome had to address chemistry, manufacturing, and controls issues -- but regulators didn't have issues with the efficacy or safety of the candidate. So, there's reason to be optimistic about the outcome. Axsome is expecting the review to take six months. If all goes well, Axsome could have a third product on the market as soon as next year.
Finally, all of Axsome's pipeline candidates are phase 2 or more advanced. So investors may not have to wait very long for the company's revenue -- and share performance -- to truly take off.
2. Moderna
Moderna (MRNA -0.47%) shares have stumbled in recent times as investors worry about revenue in a post-pandemic market. The company's only product is its coronavirus vaccine/booster -- and demand is on the decline.
So why am I bullish on Moderna? First, it's important to note that while vaccine revenue is set to fall, it won't disappear. In fact, Moderna expects the post-pandemic vaccine market to look a lot like today's flu vaccine market. That should result in blockbuster recurrent sales for Moderna.
At the same time, Moderna doesn't plan on being only a coronavirus vaccine company forever. The company has 48 programs in the pipeline. Three candidates are in phase 3 trials right now -- and could reach commercialization over the next few years.
In fact, Moderna aims to submit its respiratory syncytial virus (RSV) vaccine candidate to regulators in the first half of this year. The company probably will face competition from GSK and Pfizer -- they've recently submitted their investigational vaccines to regulators. But the adult RSV market is worth more than $10 billion, so there should be plenty of room for all three companies to benefit.
The other two close-to-market candidates are investigational vaccines for flu and cytomegalovirus (CMV). These, too, represent billion-dollar markets.
So, yes, it was great to see Moderna's explosive growth during the pandemic. But growth linked to a pandemic is short-lived. Moderna should offer investors something even better a few years from now: recurrent growth from a few different products. And that's why it's a great idea to take advantage of the stock's decline today and get in on this growth story early.
