Should Investors Consider These Top Biotech Stocks Now? 3 Making Moves
Biotech stocks have become some of the hottest stocks on the market right now. Last year, coronavirus vaccine companies led the charge as the biotech industry outpaced the broader market. Over the past year, the Nasdaq Biotechnology Index has risen by over 36%. Notably, this is more than double the gains of the S&P 500 over the same period. With the industry pumping out figures like this, it is safe to say that investors are interested. For instance, vaccine frontrunners Moderna (NASDAQ: MRNA) and BioNTech (NASDAQ: BNTX) have jumped in the past year. Understandably, these companies are behind the two vaccines to receive emergency use authorization. As more companies join the battle against coronavirus, we will likely see vaccine stocks soar with positive clinical trial updates. Accordingly, there would be a lot of investors turning their radars towards this area.
What’s In Store For Biotech Stocks In 2021?
Aside from that, the broader biotech industry has not slowed down amidst the pandemic as well. More often than not, there will be a biotech company that is reporting big gains in the week. Whether it is positive trial results or new FDA approval updates, research and developments in the sector are continuous. Seasoned investors looking for fast-growing top biotech stocks often turn to the biotech industry because of that. In fact, Precedence Research estimates that global Red Biotechnology spending will grow to about $510 billion by 2027. Red Biotechnology is the part of the industry that produces vaccines and develops new drugs and treatments.
For one thing, the sector is known for its volatility. Explosive small-cap biotech stocks often have little to no products on the market. Well, as we often say here at StockMarket.com, due diligence and proper research are key when navigating this space. To help with that, here is a list of biotech companies to watch in the stock market this week.
3 Top Biotech Stocks To Watch
- Gritstone Oncology (NASDAQ: GRTS)
- Precision BioSciences (NASDAQ: DTIL)
- Pacific Biosciences of California (NASDAQ: PACB)
Gritstone Oncology
Gritstone is a clinical-stage biotech company that specializes in developing immunotherapies. Its therapies are focused on treating multiple types of cancer and infectious diseases. Most recently, the company has added a coronavirus vaccine to its development pipeline. As news of this broke on Tuesday morning, GRTS stock soared by over 248% during intraday trading.
In detail, it has entered into an agreement with the National Institute of Health (NIH) to initiate Phase 1 testing. Adding to that, the Bill & Melinda Gates Foundation will be backing the preclinical evaluation of the vaccine. Gritstone has classified its latest work as a “second-generation vaccine”. This is important as it strives to address the concern of long-term immunity seen in its first-generation predecessors. In theory, it will do so by eliciting T-cell immunity which could give it pan-SARS/coronavirus protection, according to Gritstone. As the company joins the intense vaccine race, it does so while learning from the performance of the current leaders. Should things go as planned, the company would be playing a major role in dealing with the coronavirus pandemic. For investors, this does provide an interesting opportunity in GRTS stock.
In its recent quarter fiscal, the company reported ending the quarter with $57.6 million in cash on hand. Given its collaborations with the NIH and the Gates Foundation, it seems that Gritstone has the financial assets to follow through with its current project. If the company plays its cards right, do you see GRTS stock soaring again?
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Precision BioSciences
Precision BioSciences is another top biotech company that is heating up right now. It is a clinical-stage company that primarily works via its proprietary genome editing platform, Arcus. It has been a busy time for the company over the past two weeks. To point out, DTIL stock shot up by over 29% during yesterday’s trading session. This coincides with a regulatory update it received on one of its treatments in development.
Yesterday, the U.S. FDA accepted Precision’s Investigational New Drug (IND) application for its Non-Hodgkin Lymphoma (NHL) treatment. The company’s next-generation treatment has shown promising results during its preclinical studies. Precision found that the treatment resulted in reduced rejection rates by patient immune systems. Ultimately, this makes for a more effective means of treatment. Now, with the IND accepted, the company will have the chance to produce quality clinical responses. Subsequently, this would bring it a step closer to marketing its product. Time will tell if it can make the most of this development.
Financially, the company appears to be doing well. Precision reported a 51% year-over-year increase in total revenue. Adding to that, it ended the quarter with over $104 million in cash on hand. Throughout the quarter, Precision also expanded its intellectual property portfolio which, to-date, includes over 65 issued patents. Adding to that, the company closed a deal with Eli Lilly and Company (NYSE: LLY) last week. Through this agreement, Precision is eligible to receive up to $420 million per product developed via the use of its technology. As it stands, the company expects all this will be sufficient to fund its expenses well into 2022. All things considered, will you be adding DTIL stock to your watchlist?
Pacific Biosciences of California
Following that, we will be looking at Pacific Biosciences or PacBio for short. PacBio is a leading provider of high-quality, long-read genetic sequencing platforms and tools. Its flagship platform runs on its proprietary single molecule, real-time (SMRT) technology. PacBio’s SMRT tech provides another intricate layer of data collection in the field of biotechnology. Given all the latest advancements in the field, the company would play an important role in enabling more holistic research. Similarly, PACB stock is looking at gains of over 700% in the past year.
In its recent quarter fiscal posted in October, the company saw total revenue of over $19 million. On top of that, it also reported a 108% jump in cash on hand year-over-year. Throughout the quarter, the company upgraded its Sequel II sequencing platform and entered into multiple collaborations. Just last month, the company announced the initial findings from its coronavirus genome sequencing program. With such a busy agenda, it is no wonder that this mid-cap biotech player has been on investors’ radars.
On January 13, the company announced a multi-year collaboration with medical genetics company Invitae Corporation (NYSE: NVTA). As a result, the duo will begin the development of a “production-scale high-throughput” sequencing platform. As expected, Invitae will depend on PacBio’s expertise and industry-leading sequencing capabilities for this project. Invitae CEO Sean George explained, “This collaboration is aimed at developing the technology to make it affordable and accessible to all patients who can benefit from in-depth, full genome information.” PacBio appears to be making a name for itself in the emerging field of genome testing. Could this mean that PACB stock has more room to grow moving forward? Your guess is as good as mine.
