Prediction: These could be the best biotech stocks by 2030

Exciting trends are spreading in the biotech industry. One of them is the race to develop innovative drugs for weight loss, an area that is expected to grow steadily by the end of the decade. Gene editing, a set of techniques that allow researchers to unlock therapies for diseases that have been elusive, is another.

Companies, especially relatively small ones, that make breakthroughs in these areas could deliver market-crushing returns by 2030. Let’s consider two candidates for this.

A David in a field of Goliath

The leaders in the weight area are Novo Nordisk and Eli Lillythe two largest pharmaceutical companies in the world by market capitalization. Many other industry giants including Pfizer, Amgenand AstraZenecais also looking to make its mark in this market. However, Viking therapeutics (VKTX 0.43%)a mid-cap biotech, could become a serious challenger. Viking rose to prominence earlier this year after it released strong results from a Phase 2 clinical trial for its lead anti-obesity candidate, VK2735.

This candidate is still far from approval. It needs to get through phase 3 trials first. But that’s what could allow Viking Therapeutics stock to deliver incredible returns by 2030. It’s still a clinical-stage biotech with a promising candidate in the middle that could deliver clinical breakthroughs and strong regulatory frameworks from here on out — and that’s a recipe for success for drugmakers of this size.

Wall Street is excited about Viking Therapeutics’ potential. Andy Hsieh, an analyst at investment bank William Blair, predicts that VK2735 could generate about $21.6 billion in global sales, including $14.4 billion in the U.S. and $7.2 billion overseas. Viking is also developing an oral version of VK2735 that reported positive results in a Phase 1 study.

That’s not to mention the company’s VK2809, a potential therapy for non-alcoholic steatohepatitis, which also reported solid results in a phase 2 trial — another area expected to grow rapidly through the 2030s.

Viking Therapeutics plans to begin Phase 3 trials of its two lead candidates once it clears things up with regulators. If VK2735 and VK2809 prove effective in advanced studies and win approval without a hitch, expect Viking Therapeutics stock to skyrocket by the end of the decade.

The results of a Nobel Prize-winning discovery

CRISPR Therapeutics is a mid-cap biotech company founded in 2013. It develops gene-editing drugs using CRISPR/Cas9, a technique created by scientists who, as a result of their work, received a Nobel Prize in Chemistry in 2020. However how impressive is this. , investors would prefer to see clinical progress leading to regulatory approval.

Ask and you shall receive. Last year, CRISPR Therapeutics got its first approval (and the world’s first for CRISPR-based therapies). Casgevy, with whom he developed it together Vertex Pharmaceuticalshas obtained regulatory approval in the UK, US, European Union, Saudi Arabia and Bahrain.

Casgevy treats sickle cell anemia and transfusion-dependent beta-thalassemia, two rare blood disorders. CRISPR Therapeutics and Vertex are seeking an addressable market of 35,000 patients in the US and Europe and another 23,000 in the Middle East. Gene editing therapies are not cheap. Casgevy will cost $2.2 million in the US Bluebird Bioa low-cap gene editing specialist, exited the European market after failing to sign lucrative contracts with third-party payers.

That’s why CRISPR Therapeutics’ partnership with Vertex, a company with significant experience negotiating with insurers across much of the developed world, is so important. Beyond Casgevy, however, CRISPR Therapeutics’ work in gene editing could unlock more breakthrough drugs in the coming year. The company’s lineup features interesting candidates, including a couple that could functionally cure type 1 diabetes.

If Casgevy reaches its full potential, while CRISPR Therapeutics continues to advance programs through the pipeline, the result could be tremendous returns for shareholders.

Read the fine print

There is no doubt that Viking Therapeutics and CRISPR Therapeutics look incredibly promising. However, investors should also consider the risks associated with both biotech stocks. This is especially true for Viking Therapeutics, which does not yet have approved treatments or advanced phase trials underway. The potential of biotechnology is massive, but so is its downside. It is essential to keep this in mind.

Viking Therapeutics and CRISPR Therapeutics could be top-performing biotechs by 2030, but they could also move in the opposite direction if things don’t go their way. Invest accordingly.