Biotechnology stocks are some of the most volatile on the market. In any given year, they can swing wildly in either direction. But they have proven to be a solid investment opportunity over the long run. That being said, biotech investing isn’t for everyone. It requires a high degree of risk tolerance and a willingness to go through ups and downs that might make even the sturdiest investors nauseous. As with any investment, you should only invest money that you won’t need for at least five years. This article will explore some of the top biotechnology stocks in 2022 and beyond. These aren’t recommendations as much as they are a starting point for further research into individual companies and their potential future performance.
Regeneron Pharmaceuticals (REGN)
Headquartered in New York City, Regeneron Pharmaceuticals is a leading biotechnology company focusing on developing innovative medicines and therapies for people with serious diseases. It has a diverse portfolio of products and treatments, including RXIN stent system, EYLEA for treating retinal diseases, ibalizumab for treating inflammatory diseases, and Dupixent for chronic asthma patients, among many others. The company has a robust pipeline of more than 30 products in various stages of research and development and is primarily focused on the rapidly growing field of gene therapies. CAR-T therapy is currently developing for treating severe asthma, retinal diseases, and hemophilia. Although Regeneron is a relatively large company, it is still growing and has tremendous room for expansion. It has a strong balance sheet and pays a generous dividend of 5.8%.
Prometheus Biosciences (RXDX)
Prometheus Biosciences is a biotechnology company primarily researching and developing gene-based therapeutics for treating rare diseases and immunological disorders. Its lead product, asfotase alfa, is an enzyme replacement therapy (ERT) for treating hypophosphatasia, a metabolic bone disorder. Asfotase alfa is currently in clinical trials to treat bone mineral disorders. If approved, it will be the only product available for a rare disease that affects approximately 500 children globally, increasing the demand for the product significantly. Prometheus Biosciences is a small company with a minimal track record. Its current market cap is $37 million, meaning that any significant shift in the company’s fortunes will significantly impact the share price.
CRISPR Therapeutics AG (CRSP)
CRISPR Therapeutics is a biotechnology company focused on developing gene-based therapeutics for treating severe diseases. Its flagship product is CTX001, a gene-based therapy for treating sickle-cell disease. Sickle-cell disease is a genetic disorder affecting millions globally, particularly in sub-Saharan Africa. Current treatments are expensive and have significant side effects, so CRISPR’s gene therapy could offer a superior alternative if approved by the FDA. The company is also researching other potential treatments for beta-thalassemia, a blood disorder, and myotonic dystrophy, a muscular and neurological disease. If any of these products make it to the market, it could offer significant upside to investors.
Ascendis Pharma (ASND)
Ascendis Pharma is a biotechnology company based in Oslo, Norway. It is primarily focused on researching and developing products to treat rare diseases and disorders. Its lead product is builtin, a recombinant therapeutic protein for the treatment of Fabry disease. Fabry disease is a rare genetic disorder that causes degeneration of the vascular system. It often leads to heart attacks, strokes, and kidney failure. Brilotin is currently in clinical trials and could be a superior treatment alternative to presently available drugs. Due to its current focus on a single medicine, Ascendis Pharma is a relatively small company with a market cap of $299 million. The company is relatively young, founded in 2013, but it is increasing. It has a solid financial position, with $90 million in cash and no debt.
Other Biotech Stocks to Buy
Biotech stocks are inherently risky, so you should only consider them for a small portion of your portfolio. A good rule of thumb is to have no more than 10% of your investments in risky biotech stocks. And if you are new to the biotech stock market, you should start with even less. If you decide to buy biotech stocks, you should diversify your investments by purchasing a few different companies in the industry. And don’t forget to re-evaluate your biotech stocks every year to see if they still fit within your investment strategy.