Some investors might choose to stay out of the famously volatile biotech industry right now, given that equities are already facing plenty of uncertainty that has rocked the market. However, even in this environment, there are excellent biotech stocks to consider buying. These may or may not escape the ongoing volatility, but in the long run, they could deliver excellent returns. For those with $2,000 to spare (make sure you have enough money put away for a rainy day first), here are two biotech stocks to consider: Moderna (MRNA 0.70%) and Regeneron (REGN 0.30%).
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1. Moderna
Moderna could deliver superior returns over the long run thanks to its mRNA vaccine platform. Here are two reasons why. First, mRNA vaccines can be designed more quickly than conventional vaccines. Many traditional vaccines work by injecting a weakened virus into the patient and letting the body’s immune response essentially have a practice run at it, so that when it comes in contact with the real thing, it’s ready. However, this method requires several time-consuming steps, including growing large quantities of the virus and safely inactivating it.
mRNA vaccines work by giving the body’s immune system instructions for how to respond to viruses. This difference is one of the key reasons mRNA vaccines were developed in record time during the pandemic. Second, Moderna has a vast pipeline of promising candidates that could expand and transform its approved portfolio over the next five years. The company’s phase 3 lineup features a vaccine for the norovirus — currently, there isn’t any approved.
Today’s Change
(-0.70%) $-0.39
Current Price
$54.20
Key Data Points
Market Cap
$22B
Day’s Range
$51.76 – $56.18
52wk Range
$22.28 – $59.55
Volume
241K
Avg Vol
9.7M
Gross Margin
44.29%
Moderna could also be close to receiving the green light for a flu vaccine. Those exist, but they are typically not that effective, and there is a need for newer, better ones. Moderna is also working on a highly promising personalized cancer vaccine, mRNA-4157, that is undergoing several phase 2 and phase 3 studies.
This product proved highly effective at reducing the risk of recurrence and death in melanoma patients in combination with Keytruda (versus Keytruda alone) in a mid-stage trial. Moderna has many more pipeline candidates, too. True, the company’s financial results haven’t been strong in recent years due to the uncertainty around the coronavirus vaccine market. Since 2022, revenue and earnings have dropped significantly for the vaccine specialist.
However, Moderna’s deep pipeline and innovative technology could eventually allow it to improve and deliver excellent returns over the long run. The stock is worth serious consideration for investors. And with $2,000, one can buy about 36 shares of Moderna at current levels.
2. Regeneron
Several things make Regeneron a buy-and-hold stock. The first is the company’s current product lineup, spearheaded by Dupixent, an eczema treatment it co-markets with Sanofi. Dupixent is one of the best-selling drugs in the world and should remain a growth driver for a little while, especially as it has earned important label expansions in recent years. One of the most notable was in treating COPD.
Regeneron’s portfolio also features Eylea and its high-dose (HD) formulation, HD Eylea. The former is facing biosimilar competition, but the latter is slowly gaining momentum and is likely attracting some of the patients who were taking the original formulation. That’s because HD Eylea has a friendlier dosing regimen (it can be administered fewer times). These two franchises should keep Regeneron’s sales afloat.
Regeneron Pharmaceuticals
Today’s Change
(-0.30%) $-2.26
Current Price
$747.15
Key Data Points
Market Cap
$79B
Day’s Range
$735.07 – $750.22
52wk Range
$476.49 – $821.11
Volume
28K
Avg Vol
687K
Gross Margin
81.56%
Dividend Yield
0.48%
Second, there is the company’s pipeline. Regeneron is developing products across a range of therapeutic areas. Some of its most promising candidates include a gene therapy for genetic deafness, several cancer medicines, and a promising weight loss portfolio. Regeneron’s anti-obesity efforts could be particularly important given the rapid growth of this area. And the company’s market approach differs slightly from those of some of its peers.
Regeneron is developing a GLP-1 weight-loss medicine, but it is also working on a therapy that could be prescribed alongside GLP-1s to help patients maintain muscle mass as they lose weight. These products still have some work to do before earning approval, but they could help boost the company’s revenue and earnings if they do. Lastly, Regeneron pays a dividend and has a robust share buyback program, evidence that it prioritizes returning capital to shareholders. All of these are good reasons to hold onto the stock for a while; $2,000 gets investors two shares right now.
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