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5 Disruptive Biotech Stocks With Solid Long-Term Potential
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While the development of COVID-19 medicines/vaccines took center stage in 2020, there were positive developments in the biotech sector in other therapeutic areas too.
In this article, we discuss five companies, which have potential for long-term gains as they are developing drugs using innovative technologies. Particularly, gene editing and rare diseases are two therapeutic areas where a lot of pathbreaking research ideas are being explored. Most of these drugs are in early-stage development.
Most of these companies only have collaboration revenues/grants as their source of revenues. With R&D costs for innovative research efforts being significantly higher, most of these companies are reporting losses, as of now. However, if their drugs are successfully developed and commercialized, the companies may see astronomical revenues. It is therefore a good idea to add a few such stocks to your portfolio as they may give great returns in the next 2-3 years. Investors, at the same time, should keep in mind that investing in these biotech stocks is risky as either these companies make it or don’t depending on whether the FDA approves their innovative medicines.
Let’s take a closer look at five disruptive biotech stocks now:
Editas Medicine is a development-stage genome editing biotech, which makes medicines to treat serious diseases using its proprietary genome editing platform based on the unique Clustered Regularly Interspaced Short Palindromic Repeats (CRISPR) technology. Genomic editing using CRISPR technology to repair a defective genetic material that causes diseases is probably one of the most promising and exciting healthcare innovations seen in decades. There are only a handful of companies making medicines using this revolutionary technology and Editas is one.
Editas’ lead pipeline candidate is EDIT-101 that employs CRISPR gene editing to treat LCA10 — a rare genetic illness that causes blindness. EDIT-101, if developed successfully and eventually approved, can reap huge profits.
Editas completed dosing in the first cohort of the phase I/II BRILLIANCE study, which is evaluating EDIT-101 for LCA10. Editas is also pursuing the development of CRISPR candidates for eye diseases other than LCA10 including Usher Syndrome type 2A (USH2A) and the recurrent ocular Herpes Simplex Virus type 1 (HSV-1).
Shares of this Zacks Rank #3 (Hold) stock have risen 135.9% in the past year.
Intellia is also developing therapeutics using the CRISPR/Cas9 system targeting genetic diseases, including transthyretin amyloidosis (“ATTR”), and hereditary angioedema (“HAE”), various cancers and autoimmune diseases.
In November, Intellia Therapeutics dosed the first patient in a phase I study on its lead CRISPR/Cas9-based pipeline candidate NTLA-2001 for ATTR. This marked the company’s transition to a clinical stage biotech. Simultaneously, the company is progressing on its development plans for its other two candidates, NTLA-5001 and NTLA-2002 for the treatment of acute myeloid leukemia (AML) and HAE, respectively. It plans to file investigational new drug application (IND) to begin clinical studies for both candidates next year.
Shares of this #3 Ranked stock have risen 275.2% this year so far.
CymaBay Therapeutics
CymaBay makes innovative therapies to treat liver diseases. It is developing its lead product candidate, seladelpar, in a phase III study for primary biliary cholangitis (PBC), a rare, chronic autoimmune disease. Importantly, the study was placed on clinical hold toward the end of 2019. However, in July 2020, the FDA lifted the clinical hold, thereby permitting the company to reinstate clinical development of seladelpar in PBC. In August, the company announced positive data from the phase III study in PBC, which showed that seladelpar was safe, well tolerated, and efficacious in that patient population. CymaBay believes seladelpar has the potential to address key unmet needs for patients suffering from this serious, life-threatening disease. Another phase III study (RESPONSE) for PBC is expected to begin in the first quarter of 2021.
CymaBayhas a Zacks Rank of 3. Its shares have surged 194.4% in the past year.
Marinus is developing innovative therapeutics to treat rare seizure disorders. Its lead product candidate, ganaxolone, a Gabaa modulator, is being developed in late-stage pivotal studies for refractory status epilepticus (RSE) and CDKL5 deficiency disorder (CDD) and mid-stage studies for tuberous sclerosis complex (TSC) and PCDH19-Related Epilepsy (PCDH19-RE). In September 2020, Marinus reported positive top-line data from the phase III Marigold study, which provided evidence of efficacy in CDD. It plans to file a new drug application for ganaxolone in CDD in mid-2021. Marinus’ shares have rallied 49.6% in the past year and the stocks has Zacks Rank #3.
Some might be surprised to see the name of this huge biotech stock on this list where all other stocks are relatively small. Vertex has an established portfolio of drugs thar treat cystic fibrosis (CF) and bring in significant revenues for the company. However, it also has a rapidly advancing early-stage pipeline in five other specialty disease areas like pain, alpha-1 antitrypsin deficiency (AAT), sickle cell disease, beta-thalassemia and APOL1-mediated kidney diseases. Data from early-stage studies on some of its candidates is expected this year.
Vertex has a Zacks Rank #2 (Buy). Its shares have risen 5.5% in the past year.
Image: Bigstock
5 Disruptive Biotech Stocks With Solid Long-Term Potential
While the development of COVID-19 medicines/vaccines took center stage in 2020, there were positive developments in the biotech sector in other therapeutic areas too.
In this article, we discuss five companies, which have potential for long-term gains as they are developing drugs using innovative technologies. Particularly, gene editing and rare diseases are two therapeutic areas where a lot of pathbreaking research ideas are being explored. Most of these drugs are in early-stage development.
Most of these companies only have collaboration revenues/grants as their source of revenues. With R&D costs for innovative research efforts being significantly higher, most of these companies are reporting losses, as of now. However, if their drugs are successfully developed and commercialized, the companies may see astronomical revenues. It is therefore a good idea to add a few such stocks to your portfolio as they may give great returns in the next 2-3 years. Investors, at the same time, should keep in mind that investing in these biotech stocks is risky as either these companies make it or don’t depending on whether the FDA approves their innovative medicines.
Let’s take a closer look at five disruptive biotech stocks now:
Editas Medicine (EDIT - Free Report)
Editas Medicine is a development-stage genome editing biotech, which makes medicines to treat serious diseases using its proprietary genome editing platform based on the unique Clustered Regularly Interspaced Short Palindromic Repeats (CRISPR) technology. Genomic editing using CRISPR technology to repair a defective genetic material that causes diseases is probably one of the most promising and exciting healthcare innovations seen in decades. There are only a handful of companies making medicines using this revolutionary technology and Editas is one.
Editas’ lead pipeline candidate is EDIT-101 that employs CRISPR gene editing to treat LCA10 — a rare genetic illness that causes blindness. EDIT-101, if developed successfully and eventually approved, can reap huge profits.
Editas completed dosing in the first cohort of the phase I/II BRILLIANCE study, which is evaluating EDIT-101 for LCA10. Editas is also pursuing the development of CRISPR candidates for eye diseases other than LCA10 including Usher Syndrome type 2A (USH2A) and the recurrent ocular Herpes Simplex Virus type 1 (HSV-1).
Shares of this Zacks Rank #3 (Hold) stock have risen 135.9% in the past year.
Intellia Therapeutics (NTLA - Free Report)
Intellia is also developing therapeutics using the CRISPR/Cas9 system targeting genetic diseases, including transthyretin amyloidosis (“ATTR”), and hereditary angioedema (“HAE”), various cancers and autoimmune diseases.
In November, Intellia Therapeutics dosed the first patient in a phase I study on its lead CRISPR/Cas9-based pipeline candidate NTLA-2001 for ATTR. This marked the company’s transition to a clinical stage biotech. Simultaneously, the company is progressing on its development plans for its other two candidates, NTLA-5001 and NTLA-2002 for the treatment of acute myeloid leukemia (AML) and HAE, respectively. It plans to file investigational new drug application (IND) to begin clinical studies for both candidates next year.
Shares of this #3 Ranked stock have risen 275.2% this year so far.
CymaBay Therapeutics
CymaBay makes innovative therapies to treat liver diseases. It is developing its lead product candidate, seladelpar, in a phase III study for primary biliary cholangitis (PBC), a rare, chronic autoimmune disease. Importantly, the study was placed on clinical hold toward the end of 2019. However, in July 2020, the FDA lifted the clinical hold, thereby permitting the company to reinstate clinical development of seladelpar in PBC. In August, the company announced positive data from the phase III study in PBC, which showed that seladelpar was safe, well tolerated, and efficacious in that patient population. CymaBay believes seladelpar has the potential to address key unmet needs for patients suffering from this serious, life-threatening disease. Another phase III study (RESPONSE) for PBC is expected to begin in the first quarter of 2021.
CymaBayhas a Zacks Rank of 3. Its shares have surged 194.4% in the past year.
Marinus Pharmaceuticals (MRNS - Free Report)
Marinus is developing innovative therapeutics to treat rare seizure disorders. Its lead product candidate, ganaxolone, a Gabaa modulator, is being developed in late-stage pivotal studies for refractory status epilepticus (RSE) and CDKL5 deficiency disorder (CDD) and mid-stage studies for tuberous sclerosis complex (TSC) and PCDH19-Related Epilepsy (PCDH19-RE). In September 2020, Marinus reported positive top-line data from the phase III Marigold study, which provided evidence of efficacy in CDD. It plans to file a new drug application for ganaxolone in CDD in mid-2021. Marinus’ shares have rallied 49.6% in the past year and the stocks has Zacks Rank #3.
Vertex Pharmaceuticals Incorporated (VRTX - Free Report)
Some might be surprised to see the name of this huge biotech stock on this list where all other stocks are relatively small. Vertex has an established portfolio of drugs thar treat cystic fibrosis (CF) and bring in significant revenues for the company. However, it also has a rapidly advancing early-stage pipeline in five other specialty disease areas like pain, alpha-1 antitrypsin deficiency (AAT), sickle cell disease, beta-thalassemia and APOL1-mediated kidney diseases. Data from early-stage studies on some of its candidates is expected this year.
Vertex has a Zacks Rank #2 (Buy). Its shares have risen 5.5% in the past year.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
A chart showing the share price movement of the five stocks is given below
Zacks Top 10 Stocks for 2021
In addition to the stocks discussed above, would you like to know about our 10 top tickers for the entirety of 2021?
These 10 are painstakingly hand-picked from over 4,000 companies covered by the Zacks Rank. They are our primary picks to buy and hold. Start Your Access to the New Zacks Top 10 Stocks >>