2 Biotech Stocks to Buy Hand Over Fist in October

October is not usually a time investors look forward to in the markets. It has historically been associated with stocks moving in the wrong direction and sometimes experiencing total market crashes. The broader market has performed quite well so far this year, but could that stop in October? May be.

No matter what happens, investing in companies that will make it through bear markets and perform well in the long run is always a good idea. Consider two such biotech stocks: Amgen (AMGN 0.02%) and Vertex Pharmaceuticals (VRTX 0.28%).

1. Amgen

While it might not initially show it, Amgen has had trouble with top-line growth in recent years. In the second quarter, the company’s revenue — helped by its October acquisition of Horizon Therapeutics — rose 20% year over year to $8.4 billion. Amgen’s sales rose 5% organically, not terrible for a biotech giant, but not particularly impressive either. The good news is that it is making moves to improve on that front.

Consider the company’s thyroid disease (TED) treatment, Tepezza, which it got through its acquisition of Horizon. Tepezza remains the only treatment for TED approved by the US Food and Drug Administration. However, the drug performed poorly, according to management. Amgen has the funds and industry footprints to make stronger marketing efforts and seek approval in many countries around the world, which it has done; recently announced that Tepezza has been approved in Japan.

However, the company is not just relying on acquisitions, it is developing some interesting drugs. Perhaps the most promising is MariTide, a potential GLP-1 weight loss drug. This is currently the hottest area in the biotechnology industry. Amgen may have one of the best candidates in the sea of ​​GLP-1 drugs in development: MariTide recently performed well in phase 2 trials. Research firm Evaluate Pharma estimates it could generate $2.1 billion in sales until 2030.

Amgen’s pipeline includes several dozen programs. So expect regular new approvals or label expansions to help move the needle in the right direction in terms of financial results.

In addition, the biotech is a top dividend stock. Over the past decade, Amgen has increased its payout by 269%. Amgen’s forward yield is currently around 2.8%, compared to S&P 500his average of 1.3%.

Amgen may or may not succumb to the October effect, but the company is poised to deliver solid returns to patient investors. That’s why it’s worth buying its shares this month.

2. Vertex Pharmaceuticals

Vertex Pharmaceuticals is firing on all cylinders. The biotech still holds a monopoly on the market for treating cystic fibrosis (CF), a rare disease that affects patients’ internal organs.

Sales of its CF products continue to move in the right direction. In the second quarter, revenue rose 6% year over year to $2.65 billion. And Vertex’s top line will start growing faster soon; the company is awaiting approval of a newer and better CF therapy.

Not to mention Casgevy, a gene-editing treatment for a pair of blood-related diseases that won the green light last year in various countries. Administering gene-editing therapies is a long and complicated process, so Casgevy isn’t making a dent in Vertex’s results just yet. But the therapy, with which Vertex developed it in collaboration CRISPR Therapeuticsundoubtedly boasts potential for success.

Vertex also filed an application with the FDA for a potential acute pain drug, suzetrigin, earlier this year. Although there are pain treatments on the market, many, like opioids, can have severe side effects; suzetrigin could fill an unmet need.

Vertex’s modus operandi is to develop drugs in areas with room for improvement, or in some cases, where it exists not therapy options. The Vertex pipeline has a few candidates along these lines. Inaxaplin is a potential therapy for APOL-1-mediated kidney disease; there are no approved treatments to treat the underlying causes of this condition. The company is also developing a potential functional cure for type 1 diabetes, something that doesn’t yet exist.

Vertex Pharmaceuticals’ long track record of success, innovative capabilities and rich pipeline should enable it to perform well in the long term. Biotech investors can safely add shares of this company to their portfolios this month.