In this article, we will discuss the 10 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.
Companies like Illumina, Inc. (NASDAQ:ILMN), Intellia Therapeutics, Inc. (NASDAQ:NTLA), and Exact Sciences Corporation (NASDAQ:EXAS) are currently dominating the genomics industry.
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.
Our Methodology
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.
5. CRISPR Therapeutics AG (NASDAQ:CRSP)
Number of Hedge Fund Holders: 43
CRISPR Therapeutics AG (NASDAQ:CRSP) is a Swiss-American biotech company that is home to the CRISPR/Cas9 gene-editing technology that is working on treating cancer, diabetes, hemoglobinopathies, and other diseases.
CTX110 is a wholly-owned allogeneic CAR-T cell therapy aimed towards the treatment of CD19+ B-cell malignancies. The therapeutic has received the Regenerative Medicine Advanced Therapy (RMAT) status from the US FDA. This is similar to Breakthrough Therapy status. This recognition helps in receiving more intense guidance on research and development (R&D) and faster review of the marketing application.
CRISPR Therapeutics AG (NASDAQ:CRSP) along with its partner ViaCyte received approval from the Canadian health regulator to move ahead with the dosing of VCTX210 for type-I diabetes patients, who need daily shots of insulin to maintain their glucose level.
Following this development, in a research note issued on November 16, Joon Lee at Truist highlighted that there is “ample proof of principle” that the cell replacement therapy of CRISPR Therapeutics AG’s (NASDAQ:CRSP) VCTX210 is bordering on functional cure along with durability in the fight against diabetes. The analyst highlights the key concern related to the accessibility of cell replacement therapy to eight million patients suffering from diabetes in the US, who require a daily dose of insulin. Joon Lee is bullish on CRISPR Therapeutics AG (NASDAQ:CRSP) stock with a $220 price target and a Buy rating.
Of the 867 hedge funds tracked by Insider Monkey, 43 hedge funds held a stake in CRISPR Therapeutics AG (NASDAQ:CRSP) at the end of Q3 2021, up from 34 in the second quarter.
4. Exact Sciences Corporation (NASDAQ:EXAS)
Number of Hedge Fund Holders: 40
Exact Sciences Corporation (NASDAQ:EXAS) is a Madison, Wisconsin-based company that has invented the Cologuard home testing kit for the detection of colon cancer through DNA screening tests. The company also has Oncotype IQ in its portfolio, which is aimed towards diagnosing breast, colon, and prostate cancer through gene expression testing.
On November 3, ARK investment bought nearly 643,600 shares in Exact Sciences Corporation (NASDAQ:EXAS). ARK, under the leadership of Cathie Wood, manages numerous exchange-traded funds (ETFs) with a focus on investing in disruptive technologies. Meanwhile, Mark Massaro at BTIG maintained a Buy rating on Exact Sciences Corporation (NASDAQ:EXAS) stock with a $120 target price. The analyst is optimistic on Exact Sciences Corporation (NASDAQ:EXAS) stock due to the growth potential of the Cologuard platform, which has reached just 6% of the market and the management has a target of 40% market penetration in the long run.
Artisan Partners mentioned Exact Sciences Corporation (NASDAQ:EXAS) in its Q3 2021 investor letter. Here’s what the investment management firm said:
“In addition to trimming our positions in Atlassian, Global Payments and BioNTech, we also pared our exposure to Exact Sciences. Shares have underperformed as Cologuard’s reacceleration has not lived up to expectations. Generally, physicians’ offices are still restricting access to field sales representatives, and the delta variant is leading to another wave of delayed wellness/primary care visits. We believe inperson access to doctors for sales representatives—key to Cologuard’s growth—may remain limited for some time. Meanwhile, the company’s pipeline of new cancer diagnostics, while promising, is still several years away from contributing financially. We reduced our position size to fund investments with clearer near-to-intermediate term outlooks.”
3. Regeneron Pharmaceuticals, Inc. (NASDAQ:REGN)
Number of Hedge Fund Holders: 44
Regeneron Pharmaceuticals, Inc. (NASDAQ:REGN) is a $69 billion biotechnology company, which is making a foray into genetic sequencing through Regeneron Genetics Center. Furthermore, the Westchester County, New York-based company has its proprietary technologies, which uses genetically humanized mice to produce fully human antibodies. On the traditional front, Regeneron Pharmaceuticals, Inc. (NASDAQ:REGN) has a blockbuster eye-care therapy in the form of Eylea. Furthermore, the company’s COVID-19 antibody therapy, REGEN-COV received $2.94 billion from the US government to produce 1.4 million doses. The antibody therapy is effective in all the known strains of COVID-19 now. Phase-III research has shown that administering REGN-COV can reduce the probability of hospitalization or death by 70%.
Evan Seigerman at BMO Capital terms the track record of Regeneron Pharmaceuticals, Inc. (NASDAQ:REGN) as the best amongst the large-cap biotech stocks in his research note that was published on November 18. This further strengthens the thesis regarding the shift towards the genetic sequencing and analysis element along with testing and diagnosis. The analyst has also highlighted the “compelling” valuation that undervalues the revenue growth potential with an Outperform rating on Regeneron Pharmaceuticals, Inc. (NASDAQ:REGN) stock and a $780 price target.
Oakmark Funds shared its stance on Regeneron Pharmaceuticals, Inc. (NASDAQ:REGN) in its Q2 2021 investor letter. Here’s what the investment management firm said:
“We restored Regeneron Pharmaceuticals from a rather trivial to a more normal position size. You may recall Regeneron performed well for the Fund during the Covid-19 crisis, so we significantly reduced our position as its price-value gap narrowed. During the past several quarters, however, the market has experienced the now infamous “reopening trade,” in which companies that performed well during the pandemic trailed as the economy reopened. Regeneron suffered a similar fate and its shares have lagged the S&P 500 by roughly 4000 basis points, despite the company’s strong fundamentals and robust pipeline of new products. The underperformance widened Regeneron’s price-value gap, so we restored it to a more normal position size.”
2. Intellia Therapeutics, Inc. (NASDAQ:NTLA)
Number of Hedge Fund Holders: 37
Intellia Therapeutics, Inc. (NASDAQ:NTLA) is involved in developing genome editing capabilities to cure diseases by leveraging the CRISPR/Cas9 technology. The Cambridge, Massachusetts-based company is applying two methodologies. The first approach is an in-vivo program, which uses CRISPR injected intravenously to edit particular genes that are the root cause of the disease. Meanwhile, under the ex-vivo program, CRISPR is used to create the therapeutic by manipulating the human cells to aid in the cure of cancers and autoimmune diseases.
NTLA-2001 is the lead candidate for Intellia Therapeutics, Inc. (NASDAQ:NTLA) targeted towards the treatment of transthyretin amyloidosis (ATTR). The medication has received orphan drug status from the US Food and Drug Administration (FDA). Furthermore, Intellia Therapeutics, Inc. (NASDAQ:NTLA) has announced that the UK Medicines and Healthcare products Regulatory Agency (MHRA) has given the go-ahead to expand to bring in patients from amyloidosis cardiomyopathy (ATTR-CM). This is a positive development because 200,000 to 500,000 patients are suffering from ATTR-CM as opposed to only 50,000 patients suffering from ATTR.
Furthermore, Intellia Therapeutics, Inc. (NASDAQ:NTLA) has received approval from the New Zeeland and the UK regulatory authorities regarding the first-in-human trial of NTLA-2002, which is an in-vivo therapeutic targeted towards the treatment of hereditary angioedema. Meanwhile, in the US, the drug is in the dose-escalation and expansion stage of the Phase I/II trial. In a research note that came out on November 16, Tony Butler at Roth Capital anticipates Intellia Therapeutics, Inc. (NASDAQ:NTLA) to induct 55 patients into the study and also highlighted these catalysts as the basis for a Buy rating with a $180 target price.
Carillon Tower Advisers discussed its stance on Intellia Therapeutics, Inc. (NASDAQ:NTLA) in its Q2 2021 investor letter.
“Intellia Therapeutics is a clinical-stage genome editing company focused on the development of proprietary, potentially curative therapeutics. The company’s stock soared after announcing positive interim data from an ongoing phase 1 clinical study of its in vivo gene editing candidate, which is being developed as a single-dose treatment for hereditary transthyretin (ATTR) amyloidosis. This specific form of therapy would be the first of its kind resulting in the precision editing of a gene in a target tissue in the human body.”
1. Illumina, Inc. (NASDAQ:ILMN)
Number of Hedge Fund Holders: 55
Illumina, Inc. (NASDAQ:ILMN) is the top company in the genetic sequencing and analysis sub-industry with a market value of $58 billion. The San Diego, California-based company has 7,300 customers, who own 17,000 DNA testing and sequencing machines. The production, selling, and distribution of these machines is only one aspect of the business. Illumina, Inc. (NASDAQ:ILMN) is involved in the disposal of consumables, which is responsible for more than 50% of the top line.
Back in August, Illumina, Inc. (NASDAQ:ILMN) announced the acquisition of GRAIL for $4.5 billion in stock and $3.5 billion in cash. GRAIL is a healthcare company working on the early detection of cancers. However, Illumina, Inc. (NASDAQ:ILMN) will maintain GRAIL as a separate entity until the go-ahead from the European regulators. The Court of Justice of the European (EU) will hear the claims of Illumina challenging the jurisdiction of the European Commission (EC) on the acquisition of GRAIL.
Regarding the acquisition of GRAIL, Kyle Mikson at Canaccord commented on August 31st that although the acquisition will be dilutive for the next several years, it will be net positive for Illumina, Inc. (NASDAQ:ILMN) as there is growth potential in GRAIL. However, the deal will face short-term uncertainty due to opposition from the regulators. The analyst has given a Buy rating to Illumina, Inc. (NASDAQ:ILMN) stock with a price target of $555, reflecting a potential upside of over 49% from the current stock price.
In its Q3 2021 investor letter, Ensemble Capital mentioned Illumina, Inc. (NASDAQ:ILMN). Here’s what the investment management firm said:
“Illumina: While the stock has had quite the turbulent year so far, the company’s fundamentals have been persistently improving as demand for its sequencing instruments and consumables continues to grow in a robust manner with estimated revenue growth over 30% in 2021, after a decline of 9% in 2020. The growth is being spurred by increasing use of sequencing in applications spanning cancer treatment and screening, prenatal testing, population health studies, and tracking new Coronavirus variants. However, its recent acquisition of GRAIL, which Illumina had previously founded and spun out for development, has presented legal challenges from the competition monitoring authorities in the US and EU. GRAIL has recently begun commercializing the only non-invasive 50 cancer screening test leveraging Illumina’s gene sequencing technology which we believe will be immensely beneficial in finding and treating cancers early and will be very valuable for shareholders in the long term given the large market opportunity. Despite the opportunity ahead, the uncertainty around GRAIL caused the stock to sell off by 13% in the third quarter, but the stock is still up 11% for the year.”
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Disclose. None. 10 Best Genomics Stocks to Buy Now is originally published on Insider Monkey.
