The 20th century saw incredible scientific strides, particularly in the field of physics. In a matter of decades, we split the atom, converted silicon into computing power, and realized that everything was relative. But in these next hundred years, science is likely to take a new direction. Welcome to the Biotech Century.
The antibiotics and vaccines developed over the last hundred years changed the course of human history, wiping out illnesses that had before decimated populations. But as yet, we've yet to figure out how to prolong the natural span of a human life, not accounting for disease.
That may, however, be about to change. Two decades into the Human Genome Project, the endeavor to decode the makeup of man and womankind strand-by-strand, we're now mere years away from a complete DNA roadmap. And the implications are huge. Suddenly, cancer looks curable; creating new organs from stem cells seems like a real possibility; we may even find the proverbial Fountain of Youth, and reset the code that causes human cells to age.
What's more, genetic engineering that was once the stuff of science fiction may soon be commonplace. Gender, eye color, even personality could become manipulable traits in the very near future.
All of this is bound to raise some ethical questions, but we'll leave the moralizing to the philosophers. What we want to know is, which biotech stocks is the smart money chasing after?
Institutional investors have teams of scientific experts on the payroll that have already begun doing their research -- so unless you're willing to do all the legwork yourself, it may not be a bad idea to pay attention to their trades.
We're also looking at the biotech stocks being snapped up by company management, since they probably know more about the future of their firms than anyone else. Of course, you'll still have to do your own homework -- use this list as a jumping-off point for your own picks. (Click here to access free, interactive tools to analyze these ideas.)
Here's a list of four biotech stocks seeing significant institutional buying and insider buying over the last three months. A brief description for each company follows below.
|
Company |
Average Insider Purchases Per Year Over the Last 2 Years |
Institutional Investor Activity |
Mutual Fund Activity |
|---|---|---|---|
|
Codexis (Nasdaq: CDXS) |
Purchased an average of 10,750 shares per year |
Net institutional shares purchased during current quarter at 410.2K, vs. 6.0M net purchases during previous quarter |
Net mutual fund shares purchased during current quarter at 11.4K, vs. 378.5K purchased in the previous quarter |
|
Chelsea Therapeutics International (Nasdaq: CHTP) |
Purchased an average of 943,474 shares per year |
Net institutional shares purchased during current quarter at 3.3M, vs. 909.5K net purchases during previous quarter |
Net mutual fund shares purchased during current quarter at 6.2M, vs. 1.1M purchased in the previous quarter |
|
Exact Sciences (Nasdaq: EXAS) |
Purchased an average of 42,290 shares per year |
Net institutional shares purchased during current quarter at 640.6K, vs. 6.6M net purchases during previous quarter |
Net mutual fund shares purchased during current quarter at 408.4K, vs. 1.1M purchased in the previous quarter |
|
ZIOPHARM Oncology (Nasdaq: ZIOP) |
Purchased an average of 366,383 shares per year |
Net institutional shares purchased during current quarter at 157.2K, vs. 9.0M net purchases during previous quarter |
Net mutual fund shares purchased during current quarter at 201.2K, vs. 1.7M purchased in the previous quarter |
Some background information sourced from company websites:
1. Codexis, Inc.: Codexis applies its platform technology to customize proprietary biocatalysts derived from living organisms and evolves them to perform a desired process according to commercial specifications. Codexis biocatalysts are highly efficient "super" enzyme products that speed chemical reactions, replace costly chemical steps and enable low-carbon manufacturing processes that are highly efficient. Processes enabled by Codexis biocatalysts require relatively low energy inputs and eliminate hazardous reagents and disposal costs. The performance of Codexis biocatalysts has been verified in the biofuels, pharmaceutical and chemical manufacturing industries.
2. Chelsea Therapeutics International Ltd.: Chelsea Therapeutics is a biopharmaceutical company developing prescription products in multiple therapeutic categories such as RA, psoriasis and other inflammatory conditions. These high-potential global opportunities are balanced by the development of the company's orphan drug candidate Northera (droxidopa), an oral therapeutic currently approved and marketed in Japan, for the treatment of neurogenic orthostatic hypotension.
3. Exact Sciences Corporation: Exact Sciences is a molecular diagnostics company focused on colorectal cancer. The company has exclusive intellectual property protecting its non-invasive, molecular screening technology for the detection of colorectal cancer.
4. ZIOPHARM Oncology, Inc.: ZIOPHARM Oncology is a biopharmaceutical company engaged in the development and commercialization of a diverse portfolio of small molecule cancer drugs. The Company is currently focused on three clinical programs. As cancer costs explode, Ziopharm is one of a handful of biotech companies focusing on lower cost cancer drugs by coming up with less toxic versions of neglected old chemotherapy drugs.
Interactive Chart: Press Play to compare changes in market cap for the stocks mentioned above. Note: The numbers on top of items represent the forward P/E ratio, if available.
Kapitall's Eben Esterhuizen and Alicia Sellitti do not own shares of any companies mentioned.
