- The first firm is currently a leader in the treatment of cystic fibrosis, and it may soon branch out into another therapeutic area.
- The second firm makes a blockbuster product and predicts demand to grow this fall.
There are two top biotech stocks to buy now. These firms may be on the verge of something big. One of them has set a goal to submit for regulatory approval of a potentially game-changing drug. The other may witness another surge in demand for its blockbuster product. We’ve looked at firms’ first-quarter results and received predictions about what’s ahead for the rest of the year. These two make excellent buys at this time in June, before everything heats up later this year.
Vertex Pharmaceuticals (NASDAQ:VRTX) is a champion in cystic fibrosis (CF) treatment. It is the world’s top company in this area. Trikafta at Vertex generated more than $1.6 billion in sales last year, making it a blockbuster success story. However, according to the firm, another Vertex candidate poses the greatest threat to Trikafta. That potential drug is currently undergoing phase 3 research studies. Nevertheless, the company believes its market dominance will last until the late 2030s.
Investors have been concerned about Vertex’s prospects for onward development despite its market dominance. But those concerns may soon dissipate. Later this year, Vertex and collaborator CRISPR Therapeutics (NASDAQ:CRSP) hope to apply for regulatory approval of a blood-disease gene-editing drug.
What makes this candidate unique? CTX001 is a one-time curative treatment for beta-thalassemia and sickle cell disease. Today, there are few treatment alternatives. As a result, the approval of the Vertex candidate may be significant – not only for patients but also for the companies involved.
The price per share for Vertex’s stock is about 28 times trailing-12-month earnings. That’s compared to nearly 54 in 2020. In the same period, revenue has risen dramatically.
Looking at Vertex’s CF program in isolation, it’s clear that revenue will continue to grow. However, Trikafta has yet to reach out to all potential patients. Some people live in countries where reimbursements are not yet authorized. And Vertex is working hard to obtain permission for younger age groups and the future success of CTX001 – and maybe other pipeline products in the future – because Vertex’s growth may be just getting started.
The pandemic is winding down, and Moderna (NASDAQ:MRNA) isn’t getting the same attention as it did in the early days. Many people have already been vaccinated and boosted. And in the U.S., for example, coronavirus infections have dropped significantly from earlier this year. Moderna is still reporting billion-dollar revenue and profit today. However, investors are concerned that things may change soon.
The market’s concerns about the company have harmed its stock. Since the start of January, they’ve tumbled more than 40%. And today, the shares are selling for roughly four times trailing-year earnings, down from nine at the beginning of the year. Nevertheless, this is a bargain given Moderna’s prospects.
Let’s look at the issue of revenue decrease. It’s conceivable that vaccine sales will fall. However, we’re not sure that the movement will be significant for various reasons. First, experts believe that the coronavirus will persist. As a result, at least certain high-risk individuals will require booster vaccinations annually.
Second, Moderna is anticipating raising the cost of vaccines it sells directly to distributors significantly rather than states once it begins doing so. We don’t know when this change will occur. However, if Congress does not agree to fund vaccinations for everyone, as appears likely, then it could be as soon as this fall. Finally, Moderna is currently testing candidates such as a coronavirus/flu vaccine that may appeal to a broader audience in the future.
Why buy Moderna shares right now? Something may be around the corner. The number of coronavirus infections peaked in the winter months last year and the previous year. Moderna is already developing a booster that would cover both original coronaviruses and omicron variants. Later this month, the U.S. Food and Drug Administration will meet to consider whether to allow fall season boosters to be updated. As a result, vaccine demand might just be ahead. Now is an excellent opportunity to get involved with Moderna’s story, because it is one of the top biotech stocks to buy now.