6 Genomics Stocks Unleashing the Investment Opportunities of a Lifetime

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Genomics, the fascinating field that explores the intricacies of genes and their functions, is experiencing a remarkable transformation. The cost, accuracy, and time required to map an individual’s genome have drastically improved thanks to significant technological advancements. This progress has given rise to some very innovative companies. Here are 6 of them:

Illumina

Illumina is a leader in utilizing short-read sequencing technology, breaking DNA into shorter segments to facilitate genetic research, testing, and medical treatment analysis. With an impressive installed base exceeding 20,000 sequencing systems, Illumina currently dominates approximately 80% of the global market share. CEO Francis deSouza stepped down after fighting a losing campaign for the company’s acquisition of cancer start-up Grail. There was significant pressure from activist investor Carl Icahn, and deSouza had to make way. This could be a great time to load up on the stock. The company reported revenue of $1.09 billion for Q1 2023, up 1% from Q4 2022, down 11% from Q1 2022. The demand for sequencing services continues to rise in research applications and is experiencing rapid growth in clinical settings. Key drivers of this expansion include whole-genome sequencing, cancer testing, and recurrence monitoring. Despite undergoing regulatory scrutiny, Illumina surprised the industry by successfully acquiring Grail, a blood testing company.  

CRISPR Therapeutics 

CRISPR Therapeutics is a pioneering gene-editing company known for its groundbreaking technology that can modify faulty genes implicated in diseases like sickle cell and beta-thalassemia. Recently, the Food and Drug Administration hinted at a possible approval decision by the end of this year for Crispr’s sickle cell treatment. Such approval would mark a significant milestone as the first U.S. endorsement of a therapy utilizing the Nobel Prize-winning CRISPR technology. Crispr Therapeutics has joined forces with Vertex Pharmaceuticals in their shared mission to combat sickle cell disease. The company has experienced an impressive 45% surge in its stock value this year, outperforming the 31% rise of the Nasdaq Composite index. Crispr’s strategic collaborations with esteemed partners like Vertex, Bayer, and ViaCyte have yielded fruitful results, facilitating the advancement of its pipeline and the accumulation of a substantial cash reserve. By the end of the first quarter, the company had amassed nearly $1.9 billion in cash, providing abundant resources to fuel the development of a diverse portfolio comprising 20 cell-engineering therapies across various fields such as immuno-oncology, regenerative medicine (including edited stem cells for diabetes treatment), in-vivo therapies, and genetic blood disorders.

Intellia Therapeutics

Intellia, a company built on CRISPR technology, has witnessed fluctuations in its stock value, reaching a peak of $76.45 in the past year before declining to below $33. However, the stock has since displayed consistent upward movement. Notably, on June 11, the company shared promising data from its phase 1 study of NTLA-2002, a treatment for hereditary angioedema (HAE), a genetic disease causing chronic swelling. CEO Dr. John Leonard reported that the earliest-treated patients have remained free from attacks for over a year, and all patients have tolerated NTLA-2002 well. While Intellia is not yet profitable, it boasts a growing pipeline of more than eight therapy candidates, including collaborations with Regeneron, Novartis, and private entities. The company maintains a strong cash position, with $1.2 billion as of the end of the first quarter.

Pacific Biosciences of California

Pacific Biosciences is a leading life science technology company specializing in developing and producing advanced sequencing solutions. These solutions empower scientists and clinical researchers to gain deeper insights into the genome and tackle genetically complex challenges. The company has positioned itself for growth in the coming quarters through strategic partnerships and recent deals. Positive market sentiment, driven by a strong performance in the first quarter of 2023 and ongoing product development initiatives, is expected to contribute to its success. With a projected growth rate of 10.1% for 2023, Pacific Biosciences aims to maintain its impressive performance. The company reported a revenue of $38.9 million in the first quarter, marking a 17% increase compared to the prior year. Pacific Biosciences stands out due to its attractive valuation, the potential acquisition by Illumina (a testament to its technology), and its offering of both short-read and long-read sequencing capabilities. With its superior long-read sequencing technology, it is poised to become the industry standard shortly.

Vertex Pharmaceuticals

Vertex Pharmaceuticals is a prominent developer of therapeutics specializing in cystic fibrosis. Notably, the company acquired 60% of the profit rights from the sales of exa-cel, a gene-editing therapy developed by CRISPR Therapeutics. The forthcoming launch of exa-cel holds the potential to further enhance Vertex’s already impressive growth trajectory. Over the past three years, Vertex has consistently demonstrated outstanding growth, with a compound annual growth rate (CAGR) of 24.1% in revenue, 38.1% in EBITDA, and 29.5% in EPS. In the fiscal first quarter ending on March 31, 2023, Vertex witnessed a 13.2% year-over-year increase in net product revenues, amounting to $2.37 billion. The company’s total assets have also grown, reaching $18.97 billion compared to $18.15 billion at the end of the previous fiscal year (December 31, 2022).

Fulgent Pharmaceuticals

The fulgent stock hasn’t had the smoothest ride in recent times. Its shares have fallen 25% in the last year. Quarterly revenue is down 47% year-on-year as revenue related to Corona has dried up. However, its gradual transition to core genetic testing services has given hope. The company’s genetic testing services have experienced an impressive surge, generating a staggering 150% more revenue than the previous year, totaling $62.7 million in the first quarter of 2023. Another major plus point is that Fulgent’s financials remain stable. The company faces little financial pressure, with a substantial cash reserve of $871.3 million and minimal debt. In fact, during the first quarter of 2023, it only utilized $9.9 million in cash, further highlighting its resilience. That said, Fulgent is susceptible to investor selling pressure as an unprofitable biotech company. While its current fundamentals are sound and its future appears promising, the stock is an excellent buy for the long term. In the short-term, uncertain market conditions pose a significant challenge, potentially leading to further declines in its stock price.

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