Biotech is an area that may offer your portfolio growth today and earnings stability tomorrow. The idea is a biotech stock might soar as investors bet on the company's cutting-edge technology through its development stages -- and the stock could continue to gain after that company moves into the product commercialization stage.
Once biotech products reach the marketplace, biotech companies benefit just like pharma companies from the following: Patients need their treatments regardless of the general economic environment, and this translates into a certain level of revenue for these players.
And to truly maximize your potential for a biotech win, it's a good idea to get in on players during their early stages of growth -- and at a reasonable price. This does involve some risk because the product development process isn't always smooth and doesn't always result in victory. To minimize risk, though, consider players with a full pipeline of potential products and the resources to support their development -- and get ready to hold on for the long term.
With this in mind, let's check out two no-brainer biotech stocks to buy right now.
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1. Moderna
Coronavirus vaccine giant Moderna (MRNA 2.71%) was an investor favorite during early pandemic days, but more recently, the stock has struggled. In fact, over the past three years, it's dropped nearly 80%. Though Moderna's coronavirus vaccine isn't likely to bring in the same level of annual revenue it once did -- it peaked at more than $18 billion in 2022 -- this shouldn't discourage investors from betting on the biotech.
NASDAQ: MRNA
Key Data Points
Moderna is an mRNA specialist, and this technology is delivering compelling results across a pipeline of late-stage products -- from a cancer vaccine to vaccines for infectious diseases and latent viruses. The company recently submitted three candidates -- including a combined coronavirus/flu vaccine candidate -- for regulatory approval and aims on winning as many as 10 product approvals over the next few years.
And today, Moderna has more than $9 billion in cash to support the development of these programs. Meeting that goal could be a game changer for Moderna, spurring a new era of revenue gains and proving to investors that the company can successfully expand beyond coronavirus prevention.
Investors may have to be patient, though, as product approvals won't translate into revenue overnight. But over the next few years, we could see momentum pick up significantly. That's why today, while the stock is out of favor, may be the perfect time to get in on this future growth story.
2. CRISPR Therapeutics
CRISPR Therapeutics (CRSP 1.50%) soared a couple of years ago as it brought Casgevy, its blood disorders treatment, from late-stage development to regulatory approval. This is the first approved product based on CRISPR gene editing, a technology that "fixes" faulty genes involved in disease.
This represents a huge moment for CRISPR Therapeutics for two reasons. First, it's a vote of confidence in the company's technology, which it uses across its pipeline. And second, it opens the door to product revenue.
It's important to keep in mind, though, that the rollout of Casgevy involves a months-long treatment process, so it will take time for revenue to take off. And this may be why, in 2024 -- the first full year of Casgevy commercialization -- CRISPR Therapeutics stock actually fell nearly 40%.
NASDAQ: CRSP
Key Data Points
But if we take a long-term view, Casgevy and the CRISPR Therapeutics pipeline offer us reason to be enthusiastic about this company's future -- and its $1.9 billion in cash is another plus, suggesting the company has the financial resources to keep advancing its programs. In the latest earnings report, the biotech said the Casgevy rollout is "gaining momentum," and it expects updates from studies of CTX-112 in oncology and autoimmune indications this year.
So, catalysts for stock performance may be right around the corner, making this innovative player a no-brainer stock to buy right now while it's down.
