You don't need a pile of cash to invest in some of today's beaten-down growth stocks. Many are trading for less than $100 a share. But if you are ready to invest a couple of thousand dollars in potential growth winners, you could pick up several shares of those particular companies and multiply your gains considerably over time. Before you jump in, though, make sure you can handle some risk and accept the idea of staying invested for a period of at least five years.
If that sounds good to you, then you might consider two biotech stocks that are on the path to launching multiple products over the next few years. That can translate into significant earnings power and potential for major share gains. These stocks are down today, offering you a great buying opportunity, but their solid pipelines mean they're not out. Let's take a look at these two struggling growth players to invest in now.
1. Moderna
You probably know of Moderna (MRNA 1.69%) thanks to its blockbuster COVID-19 vaccine, its only product. But this company isn't likely to depend on the vaccine for very long. Moderna has several candidates across treatment areas in late-stage development. And the company recently said it aims to launch as many as 15 products over the coming five years.
If Moderna succeeds, this could be big, catapulting the company to annual revenue of as much as $30 billion a few years after launch. These potential products span the areas of oncology, rare diseases, and, of course, respiratory diseases such as the coronavirus. The closest to market include a vaccine candidate for respiratory syncytial virus and a combination shot to prevent coronavirus and flu. They could launch in 2024 and 2025, respectively.
Moderna also recently said it expects to bring 50 new candidates into clinical trials over the coming five years.
There's reason to be optimistic about Moderna's predictions. The company has the financial resources to meet goals after bringing in billions of dollars in earnings from its coronavirus vaccine over the past two years. This has helped -- and continues to help -- the company advance its massive pipeline.
Of course, failure can happen at any stage of development, but Moderna has advanced several candidates into late-stage studies, meaning they've passed many safety and efficacy hurdles. Finally, even if Moderna only launches a handful of products over the coming years, this still could result in solid revenue growth.
Moderna stock has dropped more than 55% so far this year, leaving it trading at about 8 times forward-earnings estimates -- a bargain for what may be ahead.
2. Axsome Therapeutics
Axsome Therapeutics (AXSM 0.27%) launched its first two products last year: Sunosi for sleep disorders and Auvelity, an antidepressant. And so far, things look promising.
In the second quarter, Auvelity product sales climbed more than 70% from Q1. Due to the positive trends, Axsome boosted its sales force to increase its reach to the 44,000 doctors who write 80% of antidepressant prescriptions. As for Sunosi, prescriptions rose 15% year over year in Q2.
Looking further ahead, Axsome has high hopes for both products, predicting peak U.S. revenue of as much as $3 billion for Auvelity and $500 million for Sunosi.
But this is just the beginning for this company that specializes in central nervous system (CNS) disorders. Axsome has a late-stage pipeline, with programs in phase 2 development or further along, and this means two things. First, these candidates have a proven degree of safety and efficacy, and second, potential launches may happen sooner rather than later.
Axsome hopes to launch four products over the next two years. Together, they could bring in peak U.S. sales of $6 billion. And Axsome says its entire CNS portfolio could bring in U.S. peak revenue of more than $11 billion. The company's solid intellectual property should support the revenue opportunity, with products such as Auvelity and Sunosi benefiting from patent protection until at least 2040.
Axsome shares have slipped 17% this year, trading well below their peak a couple of years ago. Yet today, the company offers much more visibility. So now is a great moment to get in on this player that could offer you explosive growth in the coming years.
