Generally speaking, biotech stocks to buy offer investors an excellent opportunity for significant upside success. According to Grand View Research, the global market size for the industry reached $1.02 trillion in 2021. Experts there project that the segment will expand at a compound annual growth rate (CAGR) of 13.9% from 2022 to 2030. By the culmination of the forecasted period, the market should hit $3.88 trillion.
Like any other sector, investors can choose how much risk they wish to assume in exchange for the possibility of high-magnitude rewards. All of the below ideas for biotech stocks to buy should be considered speculative. However, they also have potential catalysts that can see them produce 100% returns.
Headquartered in Monrovia, California, Xencor (NASDAQ:XNCR) focuses on expanding the therapeutic boundaries of antibody and cytokine drugs. Per its website, the company is developing a broad pipeline of drug candidates that are optimized to treat patients with cancer and autoimmune disorders. Since the start of the year, XNCR gained over 11% of equity value.
Overall, Xencor has been a steady performer considering the tough circumstances impacting the global economy. In the trailing one-year period, XNCR gained almost 3%. Some of the enthusiasm centers on its fiscal stability. For example, the company’s equity-to-asset ratio is 0.86 times. In contrast, the sector median value sits at 0.71 times. Also, its Altman Z-Score pings at 8.87, indicating very low risk of bankruptcy.
Finally, Wall Street analysts peg XNCR as a consensus strong buy. On average, their price target stands at $44.70, implying nearly 55% upside potential. At the highest, one expert targets XNCR hitting $59. If so, that would imply upside of over 104%. Thus, it’s one of the biotech stocks to buy for possibly doubling your money.
Amylyx Pharmaceuticals (AMLX)
Based in Cambridge, Massachusetts, Amylyx Pharmaceuticals (NASDAQ:AMLX) is best known for AMX0035, an experimental therapy for amyotrophic lateral sclerosis. Although one of the most scientifically relevant biotech stocks to buy, AMLX incurred a rough start this year. Since the Jan. opener, shares stumbled more than 19%. However, in the trailing year, they’re up over 104%.
Financially, Amylyx attracts plenty of attention because of its robust balance sheet. Most notably, its cash-to-debt ratio stands at 55.27 times, ranked better than 70.81% of other biotech stocks to buy. Also, its equity-to-asset ratio is 0.87 times. This stat ranks above 77.36% of the competition. Finally, its Altman Z-Score is 20.05, indicating extremely low bankruptcy risk.
At the moment, covering analysts peg AMLX as a consensus strong buy. On average, their price comes out to $50.50, implying nearly 74% upside potential. The highest price target is $54, which would be just under an 86% return. It’s not quite double but very close to it.
Agios Pharmaceuticals (AGIO)
A pioneering pharmaceutical enterprise, Agios Pharmaceuticals (NASDAQ:AGIO) specializes in therapies for genetically defined diseases, with a near-term focus on developing therapies for hemolytic anemias. While another powerfully relevant example of biotech stocks to buy, it’s off to a rough start in 2023. Since the Jan. opener, AGIO dipped nearly 21%. For the trailing year, it’s down almost 27%.
Still, it enjoys some attractive financial attributes. For instance, on the balance sheet, Agios’ equity-to-asset ratio pings at 0.89 times. This stat ranks better than 82.54% of other biotech stocks to buy. Also, its debt-to-equity ratio sits at 0.08, favorably below the sector median of 0.14 times. Finally, its Altman Z-Score hits 4.82, indicating low bankruptcy risk.
Currently, Wall Street analysts peg AGIO as a consensus strong buy. On average, their price target stands at $39.25, implying over 80% upside potential. At the highest level, one analyst sees AGIO hitting $41, implying upside of over 88%.
Morphic Holding (MORF)
Headquartered in Waltham, Massachusetts, Morphic Holding (NASDAQ:MORF) pioneers oral integrin medicines. Per its website, Morphic leverages decades of integrin expertise to transform treatment paradigms for patients. So far this year, investors have been enthused about its potential. Against the Jan. opener, MORF gained over 31% of equity value. However, in the trailing year, it’s down almost 16%.
Financially, Morphic attracts market participants thanks to its strong balance sheet. Mainly, its cash-to-debt ratio stands at 90.74 times, outpacing 75.37% of its rivals. Also, its Altman Z-Score hits 42.04, indicating extremely low bankruptcy risk.
Operationally, Morphic’s three-year revenue growth rate pings at 20.8%, above 68.48% of other biotech stocks to buy. Also, its book growth rate during the same period is an impressive 24.6%. Lastly, analysts peg MORF as a unanimous strong buy. On average, their price target stands at $63, implying almost 84% upside potential. Further, the most optimistic target is $75, implying upside potential of over 118%.
Kymera Therapeutics (KYMR)
Based in Watertown – another city in Massachusetts – Kymera Therapeutics (NASDAQ:KYMR) pioneers targeted protein degradation. Per its website, Kymera harnesses the body’s natural protein degradation system to selectively degrade disease-causing proteins. It’s an intriguing example of biotech stocks to buy and the market believes in it. Since the January opener, KYMR gained over 25% of equity value.
To be fair, in the past 365 days, KYMR lost 17%. However, it’s also been forming a series of higher lows since June of last year. Financially, Kymera enjoys a strong balance sheet. Specifically, its cash-to-debt ratio comes in at 23.49 times, beating out 62.48% of its peers. Also, its equity-to-asset ratio is 0.81 times, boxing out 65.46% of rivals.
According to the analysts, KYMR represents a consensus moderate buy. On average, their price target stands at $58, implying upside potential of almost 87%. However, the most optimistic estimate sees shares hitting $93. That’s good for upside of 199%.
Pliant Therapeutics (PLRX)
Based in San Francisco, California, Pliant Therapeutics (NASDAQ:PLRX) focuses on targeted integrin therapies. Specifically, Pliant commits to bringing patients with fibrosis hope through the discovery and development of breakthrough therapies. Its broad pipeline includes two clinical stage programs, including the first clinical stage, oral, selective small molecule integrin inhibitor. Since the start of the year, PLRX gained over 36% of equity value.
Financially, the company’s greatest (and arguably only) strengths lie in its balance sheet. For instance, its cash-to-debt ratio is 20.94, outpacing 61% of the field. As well, its equity-to-asset ratio hits 0.89 times, beating out 82.54% of rivals. Lastly, its Altman Z-Score comes in at 22.14, indicating extremely low bankruptcy risk.
However, the company features negative long-term revenue trends as well as profit margins. Thus, PLRX represents an aspirational idea among biotech stocks to buy. Nevertheless, analysts love it, pegging PLRX a unanimous strong buy. On average, their price target stands at $49.56, implying nearly 92% upside potential.
Harmony Biosciences (HRMY)
Based in Pennsylvania, Harmony Biosciences (NASDAQ:HRMY) specializes in developing and delivering new treatments to help people living with rare neurological diseases. Despite offering a compelling idea among biotech stocks to buy, Harmony easily represents the riskiest name on this list. Since the Jan. opener, shares stumbled more than 42%. In the past 365 days, they’re 39% below parity.
Despite the significant risks, Harmony features some intriguing financial metrics. On the balance sheet, the company’s Altman Z-Score pings at 5.34, indicating low bankruptcy risk. For profitability, Harmony’s net margin hits 41.44% on a trailing-year basis, outpacing 95.12% of the competition.
Also, the market prices HRMY at a forward multiple of 14.69. As a discount to earnings, Harmony ranks better than 79.66% of other biotech stocks to buy. Lastly, covering analysts peg HRMY as a consensus strong buy. Their average price target stands at $60.50, implying over 98% upside potential.
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.