The bull market is roaring higher, and many growth stocks have led the gains -- but this doesn't mean your opportunity to buy growth stocks for a good price is over. Plenty of players with great long-term prospects haven't yet benefited from this favorable market environment, and instead have remained in the doldrums.
Two examples are biotech companies Intellia Therapeutics (NTLA 6.89%) and Moderna (MRNA 3.18%), which have each dropped about 30% over the past year. There's reason to believe they could deliver growth over the long haul, though, and catalysts lie ahead in the near term for both companies. Motley Fool contributors Adria Cimino and Keith Speights discuss these innovative companies to invest in now.
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Fixing faulty genes
Adria Cimino (Intellia): Intellia works in the exciting field of CRISPR gene editing, a technology that involves fixing faulty genes responsible for disease. The idea is to cut DNA at a specific location, allowing a natural repair process to take over. The amazing thing about gene editing is that it might produce one-time treatments that serve as functional cures to certain diseases: That's a game changer for patients, and therefore could be a game changer for the earnings of companies making these treatments.
Intellia's peer, CRISPR Therapeutics, recently won regulatory approval for the world's first CRISPR-based product -- a positive sign for all of the players in this space.
And Intellia itself is moving close to the product-approval finish line with its two lead candidates: NTLA-2001 for transthyretin (ATTR) amyloidosis, and NTLA-2002 for hereditary angioedema (HAE). In ATTR amyloidosis, a buildup of a misfolded protein leads to negative effects across a variety of organs; HAE is a condition characterized by recurrent attacks of extreme swelling. Intellia aims to complete enrollment in pivotal studies of both over the next three years, and apply for regulatory approval of NTLA-2002 in 2026.
This means that if all goes well in late-stage trials, Intellia could have two products on the market later this decade, forming a path to revenue growth. Over the next few years the company also aims to launch new gene-editing programs that could result in products and revenue farther down the road.
Meanwhile, Intellia ended last year with about $1 billion in cash, so there's reason to be confident about its ability to progress toward its commercialization goals.
Now, let's consider Intellia's share performance. The stock has declined in recent years, falling more than 80% from its record level back in 2021. While it may not return to that point, from today's level Intellia stock still has plenty of room to run -- and any positive trial-data reports in the coming months could serve as catalysts for gains.
Brighter days ahead
Keith Speights (Moderna): First, the bad news: Shares of Moderna have plummeted more than 30% over the last 12 months. The biotech stock is nearly 80% below its high set in mid-2021. Now for the good news: Moderna should have brighter days ahead.
Do I expect a staggering resurgence in COVID-19 vaccine sales? No. However, I won't be surprised if 2024 is the trough year for Moderna's Spikevax vaccine. The company could even enjoy a boost (no pun intended) over the next few years from its combination influenza-COVID vaccine; Moderna expects to report results from a late-stage study of this combo vaccine later this year.
An even bigger catalyst could be on the way. Moderna hopes to soon win U.S. regulatory approval for its respiratory syncytial virus (RSV) vaccine mRNA-1345. I like the prospects for this RSV vaccine because of its efficacy, safety profile, and convenience of administration via prefilled syringes.
Moderna also hopes to file for regulatory approvals of its seasonal flu vaccine mRNA-1010 in 2024. Although I suspect it won't generate as much growth as the company's RSV vaccine will, any additional revenue will help.
The biotech should report efficacy data from a phase 3 study of experimental cytomegalovirus (CMV) vaccine this year. CMV represents a $2 billion to $5 billion opportunity -- and there are no CMV vaccines currently on the market.
Moderna predicts it will return to sales growth in 2025 and reach breakeven again in 2026. I think that timeline is reasonable, and this beaten-down biotech stock could be a major comeback story through the rest of the decade.
A buying opportunity
Both Intellia's and Moderna's shares have stumbled in recent years, but this offers you an opportunity to get in on these players for a reasonable price. They both offer promising long-term prospects, with game-changing technologies and candidates.
Of course, biotech companies always involve some risk because anything can happen during the clinical trial process. But if you can accept that, now is a great time to buy Intellia and Moderna shares.
