When it comes to investing in the future, one of the most exciting (and potentially lucrative) sectors to explore is biotechnology. This industry is at the cutting edge of scientific research, working on life-changing treatments and innovations that could redefine the way we think about healthcare. If you’re not already investing in biotech, it’s time to start paying attention!
What Is Biotech? 💊
Before diving into the exciting companies making waves in this space, let’s take a quick look at what biotechnology actually is. Simply put, biotech uses biological processes, organisms, or systems to develop new technologies and products that improve our lives.
In the world of investing, biotech companies are known for their potential for high growth, often driven by breakthroughs in research. When a company successfully develops a new drug or treatment, it can lead to massive profits for investors. But of course, the biotech world is also highly competitive and complex, so doing your homework is essential.
The biotech market was valued at $1.55 trillion in 2023 and it’s predicted to grow to $3.88 trillion by 2030.
Ready to get started? Let’s explore eight biotech companies that are leading the charge in innovation and might be worth adding to your investment portfolio.
1. Bristol-Myers Squibb Co. (BMY)
Bristol-Myers Squibb (BMS) is one of the most established names in the biotech industry, with a long history of developing breakthrough therapies. This company is a leader in immunotherapy, which harnesses the body’s immune system to fight diseases.
One of BMS's key achievements is the development of Opdivo, a game-changing immunotherapy treatment used to treat various forms of cancer. The company’s focus on oncology, cardiovascular diseases, and immunology gives it a broad portfolio that might position it well for long-term success.
Bristol-Myers Squibb offers a high dividend yield of 4.77% although right now in October 2024, this stock is considered by analysts to be a ‘Hold’.
2. Moderna, Inc. (MRNA)
We all know Moderna as the biotech company behind one of the major COVID-19 vaccines, but this company is much more than a pandemic success story. Moderna specialises in mRNA technology, a cutting-edge area of biotech that uses messenger RNA to instruct cells to make proteins that can fight or prevent diseases.
The COVID-19 vaccine demonstrated the power of mRNA technology, and now Moderna is working on using this technology for vaccines targeting other diseases, like the flu, HIV, and even some cancers.
Analysts think Moderna might increase in value by a whopping 175.99% over the next 12 months.
3. Gilead Sciences Inc. (GILD)
Gilead Sciences is well-known for its advancements in antiviral treatments, particularly in the fields of HIV and hepatitis. One of their most successful drugs, Biktarvy, is a game-changer in the HIV treatment space, offering a once-daily pill that helps manage the disease.
Gilead was also at the forefront during the COVID-19 pandemic with its antiviral drug Remdesivir, which was one of the first treatments used to combat the virus. The company continues to innovate with treatments for other serious conditions like liver disease and cancer.
This stock offers a 3.66% dividend yield.
4. Novo Nordisk A/S (NVO)
When it comes to diabetes care, Novo Nordisk is the name to know. The company is a world leader in insulin production and has been developing groundbreaking treatments for diabetes for nearly a century. But it isn’t just focused on diabetes; Novo Nordisk is also making waves in the treatment of obesity.
Its drug Wegovy, which helps patients lose significant amounts of weight, has become a popular choice in the fight against obesity. With growing concerns about global health trends related to obesity, Novo Nordisk might be well-positioned to continue to capture a large share of this expanding market.
Analysts are calling Novo Nordisk a ‘Buy’ and predicting that this stock might increase in value by 32.54% over the next 12 months.
5. Illumina Inc. (ILMN)
Illumina is a biotech company that specialises in genomics, which is the study of genes and their functions. Illumina’s technologies are used to sequence DNA, which has wide-reaching applications in everything from personalised medicine to cancer research.
Its DNA sequencing machines have been used in groundbreaking research projects, including the mapping of the human genome. Illumina is also playing a key role in the growing field of liquid biopsy, which uses blood samples to detect cancer earlier than traditional methods. This has the potential to revolutionise how we diagnose and treat cancer in the future.
6. Biogen Inc. (BIIB)
Biogen is a biotech company that focuses on neurological diseases, which is a particularly challenging area of healthcare. They are known for their work on treatments for multiple sclerosis (MS), with their drug Tecfidera being one of the most widely used MS treatments.
Right now in October 2024, analysts are calling Biogen a ‘Buy’ as they think it might grow in value by 55.50% over the next year.
7. Amgen Inc. (AMGN)
As one of the largest biotech companies in the world, Amgen has a wide-ranging portfolio that covers cancer treatments, bone health, and autoimmune diseases.
Amgen is also investing heavily in biosimilars - cheaper, highly similar versions of biologic drugs which are made from biological sources. As the patents on many biologics expire, biosimilars are becoming a growing market, and Amgen might be well-positioned to capitalise on this trend.
Amgen is currently considered to be a ‘Buy’ by analysts who think it might make a modest increase in value of 0.78% over the next 12 months. It has a dividend yield of 2.63%.
8. Regeneron Pharmaceuticals, Inc. (REGN)
Regeneron is another giant in the biotech world, known for its innovations in treating eye diseases and inflammatory conditions.
During the COVID-19 pandemic, Regeneron also developed an antibody cocktail called REGEN-COV, which was used to treat patients with mild to moderate COVID-19 symptoms. The company continues to expand its pipeline with treatments for cancer, asthma, and other chronic conditions.
At the time of writing, Regeneron is considered by analysts to be a ‘Buy’. They think it might increase in value by 13.61% in the next year.
Final Thoughts: Tips for Investing in Biotech 💡
- Do your research: Biotech is a complicated space, so make sure you understand what a company does, its pipeline of products, and the potential risks involved.
- Diversify your portfolio: Investing in multiple biotech companies can help spread your risk. You can also consider biotech ETFs for broader exposure.
- Be patient: Biotech investments often take time to pay off. Drug approvals can be a lengthy process, so consider these long-term investments.
- Keep an eye on news and clinical trials: Biotech stocks can gain or lose value based on the results of clinical trials, so staying informed is key.
Investing in biotech is exciting, and with companies like the ones mentioned here leading the charge, the future of healthcare - and your portfolio - could be very bright!
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All stock information was correct at the time of writing in October 2024.
