For investors looking for growth, biotech stocks are a great place to start one’s search. This is a sector that’s seen its valuation multiples decline in many cases to a greater extent than the overall market.

Thus, while many biotech stocks exhibit strong growth trajectories, these companies often trade at bargain prices. Much of that has to do with the necessarily high research & development expenditures these companies need to lay out over a very long period of time.

That said, there are some long-term investors who continue to accumulate a number of quality biotech stocks at these levels. Following the pandemic, many investors realized the defensive growth characteristics of these companies are worth considering. Sure, speculative growth stocks are being thrown out. But I wouldn’t put most high-quality biotechs in the same bucket.

Even in this bear market, the biotech space has immense growth potential. Investors opting for this sector can certainly ramp up their risk on upside should the market rally. But even if the market declines further, given how far many of these stocks have fallen, I’d suggest the downside may be limited with some of these names.

These are three of the top biotech stocks I think investors should look at right now.

Merck & Co. (MRK)

Merck & Co. (NYSE:MRK) is the fifth largest pharma company in the world based on its market capitalization of more than $270 billion. The company is well known for developing medications for life-threatening diseases like cancer. For example, its Keytruda is one of the most prevalent cancer medications. This medicine also forms one-third of the company’s overall sales.

Now, this drug is just one of many in the company’s vast array of pharmaceuticals. Knowing that Merck has more than one jewel in its crown is important for investors to consider, given that concentration risk is a big deal. It’s expected that new drugs are likely to account for $1 billion in sales for 2022. Some of the company’s highest-selling products include Januvia, Janumet, Gardasil and Lagevrio.

Merck’s animal health segment also generates high sales (around $1 billion in third quarter 2022). Currently, the company is actively researching additional therapeutic medications. If everything turns out as planned, Merck has the potential for immense growth. As a result, the next five years could be highly rewarding for Merck and its investors. Merck may be able to sustain a double-digit growth rate over the next five years, which is almost double the projected growth rate for the sector.

Trading at only 17x earnings with a dividend yield of 2.58%, MRK stock is about as high-quality a bet on defensive growth as investors can get in this market right now.

Novartis (NVS)

The ninth-largest biotech company is Novartis (NYSE:NVS), with a $188 billion market cap. With more than 14 top-selling products, Novartis should continue to show strong revenue growth over the long term.

The company’s best-selling drugs are aimed at neurological, cardiovascular and immunological-oriented ailments. Its top-selling drug is Cosentyx, which makes up around 10% of its net sales. Like other players in this space, Novartis continues to invest heavily in research and development. Currently, the company has more than 140 projects in its pipeline. This number itself shows the exponential growth Novartis is likely to have in the coming years.

These factors are great, but it’s the company’s dividend that I really like. With a current yield of 3.81%, this is about as high-quality of a bond-like proxy investors can want. Supported by excellent potential future cash flow growth, I have no doubt this rather cheap stock is worth a buy here.

Currently, NVS stock trades at a price-earnings ratio of less than 10, which is incredible considering the quality of this business.

Ardelyx (ARDX)

Last on this list of biotech stocks to buy is Ardelyx (NASDAQ:ARDX), a company famous for its popular drug Ibsrela. That said, there may be more to talk about when it comes to Ardelyx. That’s because the company is in the process of bringing a new experimental drug to market.

This drug is likely to be named Xphozah, helping patients with chronic kidney disease. This medicine can be a game changer, as it helps regulate blood phosphorus levels for kidney patients on dialysis. Notably, the U.S. Food & Drug Administration (FDA) appears to be in Ardelyx’s corner when it comes to the drug. They voted 10 to 2 in favor of Xphozah being used in combination with other similar drugs. So, it’s likely we’ll see FDA clearance take hold some time in 2023.

This drug’s immense potential is noteworthy. However, with a market capitalization of less than $350 million, there’s clearly plenty of risk being priced into this stock. Nothing is certain in the world of gaining approvals from the FDA.

That said, among the more speculative biotech stocks out there, I think ARDX stock may be worth a small position at these levels. The company isn’t yet profitable, but with its potential upside, I think it merits a bet, even as a potential buyout target.

On the date of publication, Chris MacDonald 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.