You don't have to invest a pile of cash to get in on some of biotech's exciting players early in their growth story. In fact, with just a few dollars, you can pick up shares of a company that could eventually make a big mark in the world of healthcare.
Of course, patience is a must, since it takes time to bring a candidate through the pipeline or sell a new technology to clients. But that's OK, since it's always best to invest for the long term -- that way, you truly can increase your chances of benefiting from a company's successes.
Today, two exciting biotech stocks represent great buying opportunities for investors with a long-term view. I'm talking about gene editing company Caribou Biosciences (CRBU -1.33%) and "organism company" Ginkgo Bioworks (DNA 10.60%).
These biotech players have a couple of things in common. Big pharma Pfizer has recognized their potential, as I'll discuss further. And they're inexpensive. With less than $10, you can buy a few shares of both of these companies and potentially reap big rewards down the road. Let's take a closer look at each.
1. Caribou Biosciences
Gene editing, or the science of fixing faulty genes responsible for disease, is a field that's gathering a lot of attention these days. The market is growing in the double digits, and several companies are working on candidates to address various diseases. Caribou Biosciences is one of them, and it may have a technique that sets it apart.
Caribou's technology allows it to make several edits to the genome instead of just one. And its combination of DNA and mRNA results in more precise edits -- reducing the chances of an edit happening in the wrong place. Pfizer recently made a $25 million equity investment in Caribou, and a Pfizer executive joined the scientific advisory board -- a key vote of confidence in the company's programs.
Caribou has won Fast Track and Orphan Drug designations for its lead candidate, paving a pathway to faster development and approval. CB-010 is a CAR-T cell therapy that, through three edits, targets CD19-positive B cell non-Hodgkin's lymphoma cancer cells, limits risks of graph-versus-host disease, and cuts down on T cell exhaustion.
CAR-T therapies are usually manufactured from a patient's own cells, but Caribou makes its products from healthy donor T cells with the idea of using them for all patients. The idea is to broaden and scale up the availability of CAR-T therapies.
CB-010 has produced positive results in its phase 1 trial so far, with a 94% overall response rate after a single dose. Caribou also is studying a candidate for relapsed or refractory multiple myeloma in another phase 1 trial.
The biotech's stock has dropped almost 30% so far this year, leaving it trading for less than $5. Caribou shares are risky, considering the company hasn't yet brought a product to market. But if the company does make it to the commercialization finish line, rewards down the road could be huge.
2. Ginkgo Bioworks
Ginkgo Bioworks specializes in the development of organisms for use in industries from pharma to agriculture. The company's cell engineering strengths allow it to help clients optimize enzymes and proteins for their needs, for instance, in drug development.
In fact, most recently, Pfizer signed a deal with Ginkgo to accelerate the discovery of new mRNA molecules. Pfizer is offering the company an up-front payment as well as potential research fees and milestone payments that could total as much as $331 million. Pfizer aims to use Ginkgo's platform to identify mRNA constructs with better stability and expression that could lead to highly efficacious products.
This means Ginkgo could play a key role in developing tomorrow's top pharmaceutical products. Ginkgo's cell engineering business has been gaining momentum. For instance, last year Ginkgo added 59 new programs to its foundry platform for 90% year-over-year growth. And foundry revenue climbed in the double digits for the year.
In the most recent quarter, Ginkgo added 21 new programs to the foundry for 62% growth year over year. And Ginkgo expanded partnerships with major companies such as Merck and Novo Nordisk.
Ginkgo also has a biosecurity segment, which helps companies, organizations, or governments with tasks like detecting a biosecurity threat. This segment grew during earlier stages of the pandemic, with its Concentric platform delivering a 66% increase in revenue last year to $334 million. As we move toward a post-pandemic situation, the company aims to build recurrent revenue through its focus on long-term biosecurity infrastructure.
Ginkgo's total revenue has steadily climbed, and the company says its $1.1 billion in cash offers it a "multiyear runway" as it marches toward profitability.
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Meanwhile, Ginkgo is trading close to its lowest ever in relation to sales, and it will cost you less than $2 a share. So now looks like a good time to get in on this innovative biotech player.
