It pays to develop novel medicines for life-threatening illnesses.
The phrase “the golden age of biotech” was somewhat popular a few years ago but now seems largely forgotten. Regardless, biotech companies can be excellent long-term investment options for several reasons.
Many are highly innovative corporations that develop breakthrough medicines for rare and hard-to-treat diseases. Even when they target more common conditions, some biotechs have deep lineups that allow them to generate steady revenue and profits.
Since lifesaving medicines are hardly optional, these drugmakers tend to perform better than most, even when the economy is down. That’s an important selling point many biotech companies can offer investors. With that as a backdrop, here are three biotech stocks that are worth holding for years to come: CRISPR Therapeutics (CRSP 1.55%), Regeneron Pharmaceuticals (REGN 1.44%), and Sanofi (SNY 1.62%).
1. CRISPR Therapeutics
CRISPR Therapeutics is a gene-editing specialist. The company’s lone product on the market Casgevy treats transfusion-dependent beta-thalassemia and sickle cell disease, two rare blood disorders. Developed together with Vertex Pharmaceuticals, Casgevy was just recently approved but was an important milestone for CRISPR Therapeutics. The companies estimate an initial target market of about 35,000 patients.
Casgevy is administered by collecting patients’ cells, which are then edited and reinserted back into the patients. CRISPR and Vertex are working on in vivo delivery for Casgevy: Instead of collecting patients’ cells first, physicians would simply administer new genes into their bodies.
The partners estimate that this would increase the potential patient population for Casgevy to the hundreds of thousands. Casgevy is priced at $2.2 million in the U.S., so it’s not hard to see the potential.
CRISPR Therapeutics has several exciting gene-editing pipeline candidates that should deliver clinical and regulatory progress in the next few years. In the meantime, though it will take a little time, CRISPR’s revenue will roll in regularly, thanks to Casgevy.
The biotech’s market capitalizaion may only be $4.7 billion, but CRISPR Therapeutics is quickly rising in prominence. Long-term biotech investors won’t want to miss the ride.
2. Regeneron
Regeneron has been one of the better performers among biotech giants in recent years, thanks to the company’s two main growth drivers: Eylea, a treatment for an eye disease co-marketed with Bayer; and Dupixent, an eczema therapy. (Regeneron shares the rights to Dupixent with Sanofi.) Both should continue driving solid top-line growth through the end of the decade. A high-dose formulation, Eylea hit the market last year.
The new approval grants patients the luxury of fewer injections per year without sacrificing efficacy, an obvious selling point. Dupixent is looking at an important label expansion in treating COPD, one that could add well over $1 billion to what has been Regeneron’s best-selling medicine.
Beyond that, Regeneron’s pipeline is exciting and should produce brand-new approvals regularly. The company is branching off into areas such as gene editing and gene therapy. Its revenue has been inconsistent in the past three years due to its coronavirus-related work. But that won’t matter over the long run. The biotech remains a solid option for investors.
REGN Revenue (Quarterly) data by YCharts.
3. Sanofi
Sanofi’s future performance will also partly depend on Dupixent, which has been an important growth driver for the French biotech. But there’s much more to the company.
Last year, it earned approval for one of the first vaccines for the respiratory syncytial virus (RSV), Beyfortus. The company’s vaccine portfolio also includes Tzield, indicated to prevent the onset of type 1 diabetes in at-risk patients. Tzield was approved in November 2022.
Sanofi is ramping up its work in the vaccine market. It expects sales from this portfolio to exceed 10 billion euros ($10.7 billion) by 2030. For context, Sanofi’s vaccine sales came in at 7.5 billion euros last year ($8.02 billion).
The company should have other products driving top-line growth, too. It recently reported positive phase 3 results for rilzabrutinib, a potential treatment for a blood disorder called immune thrombocytopenia.
Sanofi predicts peak sales between 2 billion euros and 5 billion euros ($2.14 billion to $5.35 billion) between this and other indications for rilzabrutinib. With a pipeline that carries several dozen programs, the company should deliver plenty of regulatory progress and solid financial results. The stock is another good long-term option for biotech investors.
