Investing in biotech stocks is not for the faint of heart. The sector is prone to wild swings in stock prices, offering a distinctive blend of high risk and high reward. The companies in the biotech space are consistently pushing the envelope, making them excellent investment opportunities in a perfect storm situation.
One of the biggest catalysts for the biotech sphere is the expected cutback in interest rates later this year. Biotech stocks are considered risky investments, and lower interest rates should spur increased investment in the sector. However, backing the right horse is the key to making the most out of your investment in the biotech industry. Having said that, these three companies have shown the most potential in commercializing their pipeline candidates while demonstrating a solid financial footing.
IntraCellular Therapies (ITCI)
IntraCellular Therapies (NASDAQ:ITCI) is one of the hottest biotech stocks in the market. ITCI stock has increased more than 45% in the past six months, and its antipsychotic medication, Caplyta, continues to shine in its clinical trials. To put things in perspective, Caplyta is already FDA-approved for the treatment of schizophrenia and bipolar I or II disorder. Moreover, recent trial results have shown its promise in treating other neurological disorders including major depressive disorder (MDD).
The company has been growing at a breathtaking pace over the past few years, ending last year with $464.4 million in sales, compared to $22.8 million in 2020. Its stellar top-line expansion is linked to the monstrous success of Caplyta; a game-changer for the conditions discussed earlier.
ITCI stock has been ticking in the green lately following the recent positive trial results. Moreover, if it reports positive results again in its upcoming second Phase 3 study, expect ITCI stock to go parabolic.
Viking Therapeutics (VKTX)
Viking Therapeutics (NASDAQ:VKTX) is another biotech stock that’s been on fire, having risen over 528% in the past six months. It is among the few biotech players looking to make a splash in the weight loss industry, a market that’s likely to be massive.
The company aims to tackle the weight loss market with a two-fold approach through its revolutionary injection and pill. Its VK2735 injection, which is currently in its Phase 2 trials, showed participants shedding roughly 14.70% of their body weight over a 13-week period. Similarly, its weight-loss pill showed more than 5% body weight loss in its participants in its Phase 1 trial.
Though it’s far from the finish line, the company’s progress so far is incredibly encouraging. The promising preliminary data position the company as one of the top players in the competitive weight-loss industry. Moreover, as clinical trials continue, strategic investments in Viking over the next few months could yield stellar long-term gains.
Novo Nordisk (NVO)
Novo Nordisk (NYSE:NVO) is a heavyweight in the biotech industry, having been in the game for over a century. It boasts a vast pipeline of innovative drugs, particularly in hemostasis and hormone regulation, marked by robust fundamentals underpinning its operations. With a hefty cash and short investments balance exceeding $4.47 billion, Novo has the impetus to continue expanding its business.
It is coming off a banner year, where its sales increased by an incredible 31%, trumping its 5-year average of 14%. Likewise, its EBITDA growth is at a tremendous 36% compared to its 5-year average of 144%. Perhaps the driving force for the company this year was the success of the diabetes drug Ozempic. It saw a huge increase in sales from its weight loss uses. Despite the drug shortages last year, Ozempic generated an enormous $13.9 billion in revenues, which led to a record increase in company sales.
I haven’t even gotten started about its weight loss injection. Wegovy GLP-1 injection has shown potential benefits for treating multiple conditions, including obesity, diabetes, and heart failure weight loss. Moreover, it’s also working on a weight loss pill, which furthers its already impressive growth trajectory.
On the date of publication, Muslim Farooque did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.