The bull market continues to move forward and many growth stocks have led the gains – but that doesn’t mean your opportunity to buy growth stocks at a good price is over. Many players with good long-term prospects have not yet benefited from this favorable market environment and are instead remaining in the doldrums.
Two examples are biotech companies Intellia Therapeutics (NASDAQ:EXTERNAL) And Modern (NASDAQ:MRNA), each of which fell by around 30% last year. However, there is reason to believe that they could provide growth in the long term, and catalysts lie ahead for both companies in the near term. Motley Fool writers Adria Cimino and Keith Speights discuss these innovative companies to invest in now.
Repair faulty genes
Adria Cimino (Intellia): Intellia works in the exciting field of CRISPR gene editing, a technology that repairs faulty genes responsible for disease. The idea is to cut the DNA at a specific location, allowing a natural repair process. The amazing thing about gene editing is that it can lead to once-in-a-lifetime treatments that serve as functional cures for certain diseases: that’s crucial for patients, and therefore could also be crucial for the revenues of companies that produce these treatments .
Intellia’s colleague, CRISPR therapeuticsrecently received regulatory approval for the world’s first CRISPR-based product – a positive sign for all players in this space.
And Intellia itself is approaching the finish line of product approval with its two lead candidates NTLA-2001 against transthyretin amyloidosis (ATTR) and NTLA-2002 against hereditary angioedema (HAE). In ATTR amyloidosis, the accumulation of a misfolded protein leads to negative effects on a variety of organs; HAE is a condition characterized by recurring bouts of extreme swelling. Intellia aims to complete enrollment in pivotal studies of both in the next three years and seek regulatory approval for NTLA-2002 in 2026.
That means that if all goes well in late-stage testing, Intellia could launch two products this decade, paving the way for sales growth. In the next few years, the company also plans to introduce new gene editing programs that could later lead to products and revenue.
Meanwhile, Intellia ended last year with about $1 billion in cash, so there’s reason to be confident the company can meet its commercialization goals.
Now let’s look at Intellia’s stock performance. The stock has been declining in recent years, falling more than 80% since its record high in 2021. While it may not return to that point, Intellia stock still has plenty of room to run from today’s levels — and any positive test data reports in the coming months could serve as catalysts for gains.
Brighter days are ahead
Keith Speights (Moderna): First, the bad news: Moderna shares are down more than 30% in the last 12 months. The biotech stock is nearly 80% below its peak in mid-2021. Now for the good news: Moderna may have better days ahead.
Do I Expect a Stunning Surge in COVID-19 Vaccine Sales? No. However, I wouldn’t be surprised if 2024 is the bottom year for Moderna’s Spikevax vaccine. The company may even enjoy a boost (no pun intended) in the next few years from its combined influenza-COVID vaccine; Moderna expects to present results of a late-stage study on this combination vaccine this year.
An even bigger catalyst could be on the way. Moderna hopes to soon receive US regulatory approval for its mRNA-1345 vaccine against respiratory syncytial virus (RSV). I like the prospects of this RSV vaccine due to its efficacy, safety profile and ease of administration via prefilled syringes.
Moderna also hopes to seek regulatory approval for its seasonal flu vaccine, mRNA-1010, in 2024. While I suspect it won’t generate as much growth as the company’s RSV vaccine, additional revenue will help.
The biotech company was expected to release efficacy data from a Phase 3 trial of its experimental cytomegalovirus (CMV) vaccine this year. CMV represents a $2 billion to $5 billion opportunity – and there are no CMV vaccines currently on the market.
Moderna forecasts the company will return to revenue growth in 2025 and return to breakeven in 2026. I think this timeline is reasonable, and this beaten-down biotech stock could make a big comeback later in the decade.
A buying opportunity
Both Intellia and Moderna shares have stumbled in recent years, but this offers you an opportunity to get into these players at a reasonable price. Both offer promising long-term prospects with breakthrough technologies and candidates.
Of course, biotech companies always involve some degree of risk, as anything can happen during the clinical trial process. But if you can accept that, now is a good time to buy Intellia and Moderna stock.
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Adria Cimino has no position in any of the stocks mentioned. Keith Speights has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends CRISPR Therapeutics and Intellia Therapeutics. The Motley Fool recommends Moderna. The Motley Fool has a disclosure policy.
“2 Stocks Down 30% to Buy Right Now” was originally published by The Motley Fool