Two of the best biotech stocks to buy in June
Potential catalysts await both of these biotech firms.
Summer may not immediately inspire you to think about investing. You could be planning your vacation or you could already be on vacation. However, if you have a few spare moments, now is a great time to add stocks to your portfolio. We've seen companies' first-quarter results, and they've given us some insight into what to expect later in the year.
When it comes to the future, two biotech companies may be on to something big. One of them intends to submit a regulatory application for a potentially game-changing candidate. The other may experience a surge in demand for its blockbuster product. These two stocks are excellent buys right now in June, before all of the action later this year.
Vertex plans to apply for regulatory approval of a gene-editing candidate for blood disorders later this year, in collaboration with partner CRISPR Therapeutics.
1. Vertex Pharmaceuticals
Vertex Pharmaceuticals (VRTX 1.44 percent) is a leader in the treatment of cystic fibrosis (CF). In fact, it is the global leader. Trikafta, Vertex's blockbuster, earned more than $1.6 billion in revenue last year. And Trikafta's greatest threat is actually another Vertex candidate. That potential product is currently in phase 3 research. The company expects its market dominance to last until the late 2030s.
Despite the market's strength, investors have expressed concern about Vertex's ability to expand beyond CF. But those concerns may soon be forgotten. Vertex is about to enter an exciting period. Vertex plans to apply for regulatory approval of a gene-editing candidate for blood disorders later this year, in collaboration with partner CRISPR Therapeutics.
What distinguishes this candidate? CTX001 is intended to be a once-only cure for beta thalassemia and sickle cell disease. Today's treatment options are limited. As a result, approval of the Vertex candidate could be significant for both patients and companies.
Vertex shares are currently trading at approximately 28 times trailing-12-month earnings. This is down from more than 54 about two years ago. At the same time, revenue has increased dramatically.
Even if only Vertex's CF program is considered, it is clear that revenue will continue to rise. Trikafta hasn't reached every potential patient yet. Some, for example, live in countries where reimbursements have yet to be approved. Vertex is also working to gain approval in younger age groups. When we consider the potential success of CTX001, as well as other pipeline products in the future, Vertex's growth may only be beginning.
Moderna (MRNA 3.81 percent) isn't getting nearly as much attention as it did earlier in the pandemic. Many people have already received vaccinations and boosters. In the United States, for example, the number of coronavirus cases has decreased significantly since earlier this year. Moderna continues to report billion-dollar revenue and profit. However, investors are concerned that those days are coming to an end.
Moderna's stock has suffered as a result of this concern. They've fallen by more than 40% since the beginning of January. Furthermore, the stock is now trading at roughly four times trailing-12-month earnings. This is down from nine at the start of the year. Given Moderna's future prospects, this is a steal.
Let us address the concern about a potential revenue drop. It is possible that vaccine revenue will fall. But, for a variety of reasons, I'm not convinced the shift will be dramatic. First, experts believe the coronavirus will persist. As a result, at the very least, the most vulnerable people will require annual boosters.
Second, Moderna intends to significantly raise the price of its vaccine once it begins selling directly to distributors rather than governments. We have no idea when this shift will occur. However, if Congress does not agree to fund universal vaccines, it could happen as soon as this fall. Finally, Moderna is working on candidates that could appeal to a larger number of people in the future, such as a combined coronavirus/flu vaccine.
But why should you buy Moderna stock right now? A catalyst could be on the way. Coronavirus cases peaked in the winter months of last year and the year before. Moderna is already working on a booster candidate that will protect against both the original coronavirus and the omicron variant. And the United States The Food and Drug Administration will meet later this month to decide whether to allow boosters to be updated for the fall season. As a result, vaccine demand may be just around the corner. That is why now is an excellent time to invest in the Moderna story.