Biotech stocks are full of intriguing innovators who could help pave the way for greater gains over the years ahead. Undoubtedly, it’s virtually impossible to tell exactly which pills, shots and treatments within a firm’s pipeline will eventually evolve into cash flows, let alone blockbuster cash cows. With many clinical trials to pass, even a promising late-stage candidate can still fall flat.
Biotech investors may wish to play the odds game regarding a biotech innovator’s pipeline. Some treatments will get stuck, but many will not. But as long as a pipeline is still packed and the firm has a track record for delivering, the biotech play may be worth checking out whenever shares go for a modest price.
Let’s check out a trio of biotech stocks with robust pipelines that may be flying under investors’ radars.
Moderna (MRNA)
Moderna (NASDAQ:MRNA) stock was a hot topic of discussion during lockdown and the worst waves of the COVID-19 pandemic. Indeed, Moderna stepped up in a timely fashion with its Spikevax vaccine. Based on innovative mRNA (messenger RNA) technology, the breakthrough vaccine caused MRNA stock to go parabolic. Eventually, the stock crashed hard, and a few years later, shares were pretty much where they were in December 2020.
Undoubtedly, COVID-19 vaccination rates have tanked, with the pandemic pretty much in endemic mode nowadays. Though Moderna’s COVID-19 business isn’t gushing with cash flows anymore, it’s a mistake to forget about Moderna’s impressive mRNA vaccine pipeline. The company doesn’t just have a packed pipeline; it has one full of unique candidates backed by revolutionary mRNA technology.
Nobody knows when Moderna will launch its next big blockbuster. However, the innovation factor alone, I believe, makes the stock worth considering while it’s close to $110 per share. Perhaps the recent partnership with OpenAI could accelerate progress on drug development.
Gilead (GILD)
Gilead (NASDAQ:GILD) stock has been a perennial underperformer in biotech. The stock has gone pretty much nowhere over the last decade, sinking around 16% over the timespan. More recently, GILD stock shed over 25% off its 52-week highs, partly thanks to a decent (but mostly unappreciated) quarterly showing.
Looking ahead, it’s the robust HIV and oncology pipeline that should have value investors sticking with the name as it seems to revisit multi-year depths just shy of the $60 mark. Though GILD stock has disappointed many deep-value investors for many years, I think those seeking to insulate their portfolios a bit from broader market volatility (Gilead stock has a 0.2 beta at writing) can do well with the name right here. At just three times price-to-sales (P/S), something has to give.
Though I’d not be backing up the truck at $65 and change, I think GILD stock is starting to get interesting again for long-term investors with the patience to wait for the firm’s innovative pipeline candidates (like its phase-3 HIV treatments) to move forward.
BioHaven (BHVN)
BioHaven (NASDAQ:BHVN) is a promising mid-cap biotech with a mere $3.4 billion market cap. The company, which spun off from Pfizer (NYSE:PFE) in 2022 shortly after being acquired, has one of the most intriguing innovative pipelines. Specifically, the neurological and neuropsychiatric candidates could be starring at a massive addressable market if any of its candidates gain approval.
Though BioHaven is a relative lightweight in the biotech industry, the team’s hard work behind the scenes is impressive. Though speculative, the recent 33% dip from all-time highs is enticing.
Of course, telling which candidates will evolve into blockbusters is tough. The company’s unique pipeline and industry talent are enough reasons to watch BHVN stock closely on the dip. Of the trio, BioHaven is the riskiest play but perhaps the most exciting for upside-seeking investors with a high tolerance for risk and volatility.
On the date of publication, Joey Frenette did not hold (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.