In the year of a global pandemic, it’s no surprise that investors are clamoring for biotech stocks. There are hundreds of biotech startups out there. Plus, established biotech companies. It begs the question: what are the top biotech stocks to consider in 2021? 

There are more than a few promising options out there, spanning all focuses. From immunotherapy drug makers to medical device companies, biotech stocks are booming! Here’s a look at the top eight companies from across the sector and the tailwinds driving positive outlooks for them. 

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1. Alnylam Pharmaceuticals

As we near the cusp of a breakthrough in gene editing technology, companies in this sector become increasingly appealing. Alnylam Pharmaceuticals (Nasdaq: ALNY) is one of them. The company specializes in RNA interference therapeutics for genetically defined diseases. Its pipeline of products includes genetic medicines, medications for cardio-metabolic diseases, infectious diseases and ocular diseases. Currently, the company has four products on the market, four in late-stage clinical trials and six in development. This strong pipeline in an up-and-coming sector makes Alnylam Pharmaceuticals a top choice in 2021. 

2. ALX Oncology Holdings Inc.

The fight against cancer is an ongoing one, with frequent breakthroughs that inch us closer to a cure. ALX Oncology Holdings Inc. (Nasdaq: ALXO) is paving the way for more effective treatments. The company focuses specifically on CD47: a surface cell protein that helps cancer evade the immune response. To combat it, the company is mobilizing ALX148, a therapy to invalidate CD47. Strong results from clinical trials and a huge potential market for therapy makes ALX Oncology Holdings Inc. a bright prospect as an oncology-focused investment. 

3. Argenx

Argenx (Nasdaq: ARGX) focuses on immunology and innovations in effective immunotherapy treatments. The company has four products in its pipeline, in varying stages of clinical trials. As the prospect of intravenous gene therapy gains momentum, this is one company that’s poised to have treatments vetted and approved by the time the market comes into its own. And, with prospective treatments for Leukemia, airway inflammation and severe autoimmunity conditions, Argenx stands to capitalize on a new wave of medicine. The only weight against it is the same knock against all biotech stocks: significant cash burn.

4. Fate Therapeutics 

Another company focused on cancer and immune disorders, Fate Therapeutics (Nasdaq: FATE) focuses on cellular therapy. The company has a strong and promising pipeline, with five products in first-stage clinical trials and several more in preclinical stages. While the company’s stock has suffered recently, it remains a contender in the immuno-oncology biopharmaceutical space. With plenty of funding to go around and promising research on iPSC-based NK-cell and T-cell immunotherapies, the company should have a strong runway for growth. 

5. Incyte

The recent European approval of its drug Pemazyre has put Incyte (Nasdaq: INCY) in the limelight as a biotech opportunity. The drug—which treats metastatic cholangiocarcinoma—was swiftly approved on strong clinical trialing. It’s the first treatment of its kind for cholangiocarcinoma with a FGFR2 fusion. This newest drug joins a strong portfolio and pipeline of products. The company focuses on targeted therapies, immune-oncology and autoimmunity—markets rife with potential. Despite a rough start to the year, the company stands poised to rebound through the end of 2021 as it leans on a profitable balance sheet—which is more than many biotechs can say.

6. Neurocrine Biosciences

A major uptick in profitability has investors eyeing Neurocrine Biosciences (Nasdaq: NBIX). It’s one of the few profitable biotech stocks on this list. The company focuses on broad quality of life treatments for those afflicted with Parkinson’s disease, Tourette syndrome, and congenital adrenal hyperplasia. With four drugs commercially available and several more in various clinical stages, the company makes a strong buy-and-hold case through 2021 and beyond. While down for Q1 of the year, strong momentum and a reasonable P/E make Neurocrine Biosciences a safer play than many other biotech stocks.

7. Novavax

This list of top biotech stocks for 2021 wouldn’t be complete without a vaccine producer! Since the rollout of the COVID-19 vaccine, Novavax (Nasdaq: NVAX) has struck up deals with countries around the world. Most recently, to fill and finish 60 million doses for the U.K. While the COVID-19 bump is only temporary, the company has proven its ability to answer the call for vaccine production. With COVID-19 variants and seasonal flu on the horizon, it’s likely to retain partnerships and agreements that make it a long-term vaccine provider. Investors can expect the stock to fall in the near term. That said, it’s likely to find support and stabilize before growing through the end of 2021.

8. Regeneron Pharmaceuticals

The largest biotech stock on this list, Regeneron Pharmaceuticals (Nasdaq: REGN) is here for a reason. An extremely strong balance sheet, low P/E and promising new products make this biotech a big-time buy. Its most recent antiviral cocktail has cut COVID-19 hospitalizations by 70%. Analysts expect demand for this drug and others like it to grow through 2021. Not to mention the company’s strong-performing portfolio of authorized drugs. And, the company has a massive pipeline of drugs for everything from infection diseases to oncology. In the world of biotech plays, Regeneron Pharmaceuticals could be among the safest. It’s also likely undervalued. 

Investing in the Top Biotech Stocks

The biotech sector has become a very interesting play for investors. Therefore, it’s important to stay ahead of news cycles and stock trends. Sign up for the Investment U e-letter below. You will gain access to expert stock tips and analysis on a daily basis.

Interested in any of these top biotech stocks for 2021? Consider adding one (or more) of them to your portfolio. Many of them are small caps with huge upside, and others are stable mid cap stocks with plenty of history behind them. No matter how you choose to invest in them, biotech stocks remain a strong bet for the future, well beyond the lingering effects of a global pandemic.

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