Unlike many other market segments, biotech stocks stand out for their direct relevance. For example, investors who typically wager on aerospace and defense plays usually aren’t fighter pilots. Or stakeholders of exotic car companies don’t typically engage in motor racing. However, the broader healthcare space affects every one of us.
Recently, news broke that King Charles III is receiving treatment for cancer. Sure enough, well wishes from around the world poured in because Britain’s monarch and head of state reminded us of the frailty of the human experience. If one of the most powerful people on the planet can get cancer, it demonstrates that this disease cares not for any of the artificial barriers that we hold so dear.
Stated differently, cancer doesn’t discriminate. Whether rich or poor, privileged or underserved, if it wants to strike, it will do so. And that goes for other diseases and conditions. The good news? Innovations are sprouting all the time, bringing light to the shadows. With that, below are compelling biotech stocks that are fighting America’s deadliest diseases.
Bristol Myers Squibb (BMY)
One of the premier biotech stocks to buy, Bristol Myers Squibb (NYSE:BMY) manufactures prescription pharmaceuticals and biologics in several therapeutic areas. One of its specialties involves blood cancers such as leukemia or lymphoma. According to the Leukemia & Lymphoma Society, an estimated combined total of 184,720 people in the U.S. are expected to be diagnosed with hematological malignancies.
To address this devastating class of diseases, Bristol Myers Squibb has two drug candidates undergoing Phase 1 trials. As well, it has several other drugs in a similar stage of safety trials for specific conditions such as acute myeloid leukemia (AML).
On a business level, BMY commands a large addressable market. According to Data Bridge Market Research, the global blood cancer therapeutics sector reached a valuation of $43.71 billion in 2021. Further, by 2029, the segment should hit $89.68 billion by 2029. If so, that would represent a compound annual growth rate (CAGR) of 9.4%.
Analysts expect good things out of BMY, rating shares a consensus moderate buy with a $57.79 average price target.
Gilead Sciences (GILD)
Another top-flight name among biotech stocks, Gilead Sciences (NASDAQ:GILD) has been at the forefront of groundbreaking medical research. In full disclosure, Gilead has been incredibly volatile this year, losing about 11% of equity value. Still, that might be a discount for long-term investors. One of the company’s core relevancies centers on developing antiviral drugs used in the treatment of HIV/AIDS.
According to government statistics, approximately 1.2 million people in the U.S. have HIV. What’s concerning is that about 13% of these individuals don’t know it and therefore require testing. Further, health agencies have described the situation as an epidemic. To address this growing need, Gilead researchers have developed 12 HIV medications, including the first single-tablet regimen to treat HIV.
Per Grand View Research, the global HIV therapeutics market size reached a valuation of $10.33 billion in 2022. By 2030, the sector could hit revenue of $11.34 billion. Overall, analysts peg GILD a consensus moderate buy with an $88.69 average price target. The high-side target lands at $115, implying almost 55% upside potential.
Biogen (BIIB)
Another large-capitalization enterprise, Biogen (NASDAQ:BIIB) is one of the most recognized biotech stocks. Offering a range of therapeutics, it arguably offers excellent long-term value. Yes, shares have slipped about 24% over the trailing five years. However, its leadership in several key areas, particularly neurological diseases should make BIIB relevant for decades to come.
According to its website, Biogen commands a world-class neurology research and development organization, which pushes toward novel approaches for previously intractable neurodegenerative conditions such as Alzheimer’s disease. Further, the company explains that 55 million people suffer from dementia worldwide, with 60% to 70% of cases being Alzheimer’s.
Financially, one of Biogen’s biggest strengths is its excellent margins across the board. As well, it enjoys a return on equity (ROE) of 10.6%, beating out nearly 70% of other drug manufacturers.
Analysts view BIIB as a consensus moderate buy with a $306.29 average price target, implying over 27% upside potential. The high-side target lands at $379, projecting almost 58% growth.
BioMarin Pharmaceutical (BMRN)
One of the mid-cap biotech stocks, BioMarin Pharmaceutical (NASDAQ:BMRN) features offices and facilities in the U.S., South America, Asia, and Europe. Per its public profile, BioMarin’s core business and research revolves around enzyme replacement therapies. Notably, the company was the first to provide therapeutics for mucopolysaccharidosis type I and phenylketonuria. In the trailing year, BMRN dipped 19% although it’s attempting to recover in recent sessions.
On a broader level, BioMarin intrigues as one of the biotech stocks fighting America’s deadly diseases through its directive on addressing rare genetic diseases. While such conditions don’t always generate headlines, because of that very situation, they impose high medical needs. Through BioMarin’s pipeline, the biotech offers hope through therapeutics that address diseases like achondroplasia (a rare genetic bone growth disorder) and phenylketonuria, a metabolic disorder.
According to Grand View Research, the global rare disease treatment market size reached a valuation of $119.6 billion. By 2030, the segment could be worth almost $336 billion. Notably, analysts peg shares a moderate buy with a $107.10 average price target. However, the high-side target shoots up to $170.
Alkermes (ALKS)
A fully integrated biopharmaceutical company, Alkermes (NASDAQ:ALKS) focuses on developing medicines for psychiatric and neurological disorders. While this broad umbrella might not seem to be particularly deadly, mental health represents a complex and interwoven matter. Without proper treatment, circumstances can spiral out of control, leading to depression and self-harm. Fortunately, Alkermes is burning the midnight oil to address this mental health crisis.
In particular, Alkermes played a significant role in combating the opioid dependence epidemic. Looking ahead, the company has several therapeutic candidates under the neuroscience category in various clinical stages. Broadly speaking, Alkermes falls under the central nervous system (CNS) therapeutics market, which is a sizable one. According to Grand View Research, the global CNS therapeutics sector reached a valuation of $116.2 billion in 2020.
By 2028, the space could print revenue of $205 billion. If so, that would represent a CAGR of 7.4%. Analysts have high hopes, rating shares a moderate buy with a $34.67 average price target. Further, the high-side target hits $42, projecting growth of over 57%.
Arrowhead Pharmaceuticals (ARWR)
Based in Pasadena, California, Arrowhead Pharmaceuticals (NASDAQ:ARWR) develops medicines that treat intractable diseases by silencing the genes that cause them. To accomplish this directive, it uses a broad portfolio of RNA chemistries and efficient modes of delivery to induce rapid, deep, and durable knockdown of target genes. Further, its latest Form 10-K states that its pipeline consists of 14 clinical-stage investigational medicines, ranging in the development stage from Phase 1 to Phase 3.
Over the past 52 weeks, ARWR slipped about 3%. However, this underperformance could be an opportunity to get in. As a specialist in the field of novel drug development, it enjoys tremendous upside potential. According to Precedence Research, the global drug discovery market reached a valuation of $55.46 billion. By 2032, the sector could jump to $133.11 billion, or a CAGR of 9.2%.
That might be on the conservative side. Per Acumen Research and Consulting, the same space could soar to $181.4 billion by 2032. Either way, analysts peg ARWR shares a consensus moderate buy with a $53.70 price target. And the high-side target jumps to $90, a 184% profit.
Agios Pharmaceuticals (AGIO)
Headquartered in Cambridge, Massachusetts, Agios Pharmaceuticals (NASDAQ:AGIO) is a pharmaceutical company pioneering therapies for genetically defined diseases. Per its public profile, it features a near-term focus on developing therapies for hemolytic anemias. Moreover, its Form 10-K explains that it levers leadership in the field of cellular metabolism to create differentiated, small-molecule medicines for rare diseases. Over the past year, shares dipped about 20%.
Currently, one of the reasons why AGIO is gaining traction among biotech stocks to buy is its acumen rare metabolic diseases. As mentioned earlier, it’s attempting to help people living with hemolytic anemias, who may suffer acute symptoms and long-term complications. Further, their disorders may significantly impact their quality of life and daily functioning.
Notably, Agios is plying its trade in a sizable market. For example, the global inherited metabolic disorders testing market reached a valuation of $603.4 million in 2022. However, by 2030, this space could fly to over $1.12 billion.
Finally, analysts rate shares a consensus strong buy with a $43 average price target, implying almost 82% upside.
On the date of publication, Josh Enomoto 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.