In this article, we will discuss the 10 best genomics stocks to buy now. You can skip our detailed analysis of these stocks and go directly to the 5 Best Genomics Stocks to Buy Now.
Genomics is the branch of biology that deals with the study of human genes. The genome is the complete set of DNA of an organism. Every cell carries copies of nearly three billion DNA base pairs. Organizations operating in the genome industry can be divided into three sub-industries. The first sub-industry is related to Genetic sequencing and analysis. Companies involved in this sub-industry are into sequencing or, in simpler terms, reading and understanding over three billion DNA base pairs. The second sub-industry is Genetic testing and diagnostics, which take the sequencing aspect a step further and use it to pinpoint certain variations in genes and map them to known conditions. The third sub-industry investigates gene editing, which looks into treating or curing diseases that are caused by genetic variants.
Government-Backed Investments in Genomic Research
Governments in a number of countries have made significant investments in genomics in recent years. These government investments have considerably aided the development of new technology. One such example is the “Genome India Project” launched by The Department of Biotechnology (DBT) in January 2020. (GIP). The goal of the initiative is to collect 10,000 genetic samples from Indian residents in order to create a reference genome. Precision health, uncommon genetic illnesses, the mutation spectrum of genetic and complex diseases are some of the areas of attention for this project.
In September 2019, a $224 million whole-genome sequencing initiative was launched, bringing together pharmaceutical companies and health professionals to investigate and decode the genetic code of 500,000 volunteers at the UK Biobank in Stockport, UK. The project’s goal is to improve health via genetic research and enhance the prevention and treatment of a variety of serious and life-threatening diseases, such as dementia, cancer, and heart diseases.
Moreover, in February 2019, the Minister of Science and Sport of Canada stated that Genome Canada would receive $22.7 million in funding, in addition to $33.4 million from provincial governments, to support 36 research initiatives. Various areas, such as health, agriculture, natural resources, and the environment, are represented in the initiatives. These financing initiatives are likely to boost genomics product usage, leading to significant market growth.
The COVID-19 Impact
COVID-19 has had a favorable influence on the genomics industry. Researchers are utilizing genomics to track coronavirus transmission and determine its influence on the human genome by monitoring the virus’s genome sequence. The worldwide genomics market is likely to develop in the following years as a result of continuous research. By 2028, the global genomics market is expected to reach $94.66 billion, with a CAGR of 19.4% over the forecast period.
With this context in mind, let’s begin our list of the 10 best genomics stocks to buy now. We have taken into account the analysts’ ratings, growth catalysts as well as hedge fund sentiment to choose the stocks. The hedge fund sentiment is based on the 867 hedge funds being tracked by Insider Monkey as of Q3 2021.
10 Best Genomics Stocks to Buy Now
10. Beam Therapeutics Inc. (NASDAQ:BEAM)
Number of Hedge Fund Holders: 20
Beam Therapeutics Inc. (NASDAQ:BEAM) is a biotech company involved in the creation of genetic medicines through base editing. Base editors allow the rewriting of a single letter of the genome and have the potential to create treatments that can last a lifetime for patients suffering from serious ailments. Base editing is the second generation of CRISPR technology. The biggest benefit of the second generation is that it is more effective in gene editing compared to the first generation. Beam Therapeutics Inc. (NASDAQ:BEAM) also has access to the generation of CRISPR technology known as Prime editing.
Like other companies in the genome industry, the Cambridge, Massachusetts-based company is trying to find a treatment for sickle cell disease and beta-thalassemia through BEAM-101. The company progressed to BEAM-102 that has achieved higher levels of editing of the sickle cell mutation. Beam Therapeutics Inc. (NASDAQ:BEAM) also has other therapeutics in its portfolio for the treatment of liver and ocular ailments.
Furthermore, the company has licensed out its base editing platform to other companies as there are many different diseases that can be cured by finding treatment through the base editing platform. A prime example of such a partnership is with Verve Therapeutics Inc. (NASDAQ:VERV). Although Verve would have to take care of all the potential development costs, Beam Therapeutics Inc. (NASDAQ:BEAM) would still get a 50% share in profit. This reflects the value of the base editing platform offered by Beam Therapeutics.
On September 23, Dae Gon Ha at Stifel resumed coverage on Beam Therapeutics Inc. (NASDAQ:BEAM) with a Buy rating and a $120 price target. The analyst believes that Beam Therapeutics Inc. (NASDAQ:BEAM) “deserves a comparable level of interest” for all the reasons that excite investors on the CRISPR/Cas9 platform. The price target presents a potential upside of roughly 47% from the current target price.
Apart from Beam Therapeutics Inc. (NASDAQ:BEAM), Illumina, Inc. (NASDAQ:ILMN), and Intellia Therapeutics, Inc. (NASDAQ:NTLA), Exact Sciences Corporation (NASDAQ:EXAS) is also attracting hedge fund investment.
9. Editas Medicine, Inc. (NASDAQ:EDIT)
Number of Hedge Fund Holders: 22
Editas Medicine, Inc. (NASDAQ:EDIT) is a genome editing company that is leveraging the CRISPR/Cas9 and CRISPR/Cpf1 genome editing platform to find a cure for serious diseases globally. Editas Medicine, Inc. (NASDAQ:EDIT) is looking to address every aspect of the supply chain, ranging from discovery, development, manufacturing, and commercialization of genome therapeutics for a wide range of diseases. The company has focused on three major areas of specialization, namely blood diseases, ocular diseases, and oncology.
Editas Medicine, Inc. (NASDAQ:EDIT) reported its Q3 2021 results before the opening bell on November 8. The loss per share for the quarter came in at 57 cents as opposed to the analysts’ forecast of 82 cents. Meanwhile, the revenue for the three months was $6.197 million as compared to the consensus forecast of $4.78 million.
The stock recently jumped after reporting positive preclinical data showing that its proprietary AsCas12a gene editing was able to reduce solid tumors.
On September 10, Jay Olson from Oppenheimer initiated coverage on Editas Medicine, Inc. (NASDAQ:EDIT) with an Outperform rating and a price target of $80. The analyst based this price on the favorable outcome of EDIT-101 clinical results for the treatment of Leber congenital amaurosis 10 (LCA10).
8. bluebird bio, Inc. (NASDAQ:BLUE)
Number of Hedge Fund Holders: 17
bluebird bio, Inc. (NASDAQ:BLUE) is an interesting pick on the list as the company has undergone a spin-off of its cell therapy division as a separate publicly listed company, 2seventy bio, Inc. (NASDAQ:TSVT). Following the spin-off of the oncology programs and other portfolios, the stock will be a pure-play in coming up with treatments for severe genetic diseases. The spin-off gives potential investors to take a position in bluebird bio, Inc. (NASDAQ:BLUE) stock on the catalysts at play.
bluebird bio, Inc. (NASDAQ:BLUE) has three first-in-class gene therapies in the US. After the closing on November 22, the US FDA granted Biologics License Application for betibeglogene autotemcel (beti-cel) a priority review. Beti-cel is a gene therapy targeted towards the treatment of beta-thalassemia in adults, adolescents, and kids across all genotypes and is a replacement for red blood cell transfusions and iron chelation therapy. bluebird bio, Inc. (NASDAQ:BLUE) also has bb1111 and elivaldogene autotemcel (eli-cel) for the treatment of sickle cell disease (SCD) and cerebral adrenoleukodystrophy (CALD).
Following the spin-off, Luca Issi at RBC Capital lowered the price target from $26 to $14 to incorporate the impact of the spin-off on the shares of bluebird bio, Inc. (NASDAQ:BLUE). The analyst thinks that the spin-off makes strategic sense.
7. Pacific Biosciences of California, Inc. (NASDAQ:PACB)
Number of Hedge Fund Holders: 27
Pacific Biosciences of California, Inc. (NASDAQ:PACB) is one of the pioneers of genome sequencing technology through its single-molecule, real-time (SMRT) sequencing technology. The Menlo Park, California-based company claims to provide the longest average read lengths, highest consensus accuracy, and most consistent coverage.
Pacific Biosciences of California, Inc. (NASDAQ:PACB) has signed a multi-year contract with Invitae Corporation (NYSE:NVTA) to work together in reducing the cost of genome sequencing for individuals. The first phase of the contract is targeted towards epilepsy. The aim is to find the cause of epilepsy through genome sequencing and treat it with targeted medicines on a case-to-case basis. 50 million patients are living with epilepsy, but the root cause for the disease is unknown to half of them and this provides an addressable market of 25 million patients to Pacific Biosciences of California, Inc. (NASDAQ:PACB) and Invitae.
Kyle Mikson at Canaccord initiated coverage on Pacific Biosciences of California, Inc. (NASDAQ:PACB) on September 27 with a price target of $45 and a Buy rating. The analyst thinks that the SMRT sequencing technology gives out “highly accurate” analysis of animal, human, and plant genomes in real-time.
The analyst further believes that there is a favorable difference in technology for Pacific Biosciences of California, Inc. (NASDAQ:PACB) as its platform provides complex genomic analysis with the systematic bias at the lowest level. Furthermore, Pacific Biosciences of California, Inc. (NASDAQ:PACB) has injected $900 million into its operations through a secondary stock offering and this will provide the company with ammunition in the form of cash to pursue aggressive growth targets.
6. 10x Genomics, Inc. (NASDAQ:TXG)
Number of Hedge Fund Holders: 28
10x Genomics, Inc. (NASDAQ:TXG) is a developer and seller of instruments, consumables, and software that has resulted in discoveries in the field of immunology, oncology, and neuroscience. The Pleasanton, California-based company has sold more than 2,400 chromium instruments to top institutions across the world. Over 1,000 patents have been issued or filed due to the 10x Genomics, Inc. (NASDAQ:TXG) platform.
10x Genomics, Inc. (NASDAQ:TXG) reported its Q3 2021 results after the closing bell on November 3. Revenue came in at $125.3 million, which outperformed the analysts’ estimate of $122.62 million. Meanwhile, the loss per share came in at 15 cents compared to analysts’ forecast of 20 cents. Furthermore, 10x Genomics, Inc. (NASDAQ:TXG) narrowed down its FY21 guidance from $480 million to $500 million to $490 million to $500 million, which is higher than the analysts’ estimate of $489.77 million.
A research note that came out on October 14 by Dan Brennan at Cowen gave an Outperform rating to 10x Genomics, Inc. (NASDAQ:TXG) with a price target of $205. The analyst highlights the company’s high-level exposure in 3D spatial, single-cell, and new generation sequencing (NGS) as potential catalysts for upside. Of the 867 hedge funds tracked by Insider Monkey, 28 held a stake in 10x Genomics, Inc. (NASDAQ:TXG) at the end of Q3 2021.
In addition to 10x Genomics, Inc. (NASDAQ:TXG), companies like Illumina, Inc. (NASDAQ:ILMN), Intellia Therapeutics, Inc. (NASDAQ:NTLA) and Exact Sciences Corporation (NASDAQ:EXAS) are dominating the genomics industry.
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Disclose. None. 10 Best Genomics Stocks to Buy Now is originally published on Insider Monkey.