Exelixis, Inc. (EXEL), Vertex Pharmaceuticals Incorporated (VRTX), Celgene Corporation (CELG): Want Multibaggers? Consider These 3 Biotech Companies

Celgene’s share price has come a long way, and I believe that the company still has the potential to deliver multibagger returns over the long term due to the continued success of Revlimid and its ever-improving product portfolio.

Foolishly invest in biotech for multibagger opportunities

Vertex Pharmaceuticals Incorporated (NASDAQ:VRTX)’s significant move higher in April illustrates the amazing return potential and volatility of biotech companies. While it is also possible for biotech companies to plummet significantly on disappointing data or approval delays, the long-term capital gain potential of a select group of biotech companies makes it worth riding out the volatility.

I believe that the biotech industry is one of the most important industries to invest in due to the life-changing therapies that advanced biotechnology medications provide, as well as the extended patent protection periods associated with these medications.

A $10,000 investment in Celgene 20 years ago would be worth $1.68 million today. These are the level of returns that are possible in the biotech industry, and that could potentially be achieved with an investment in Exelixis, Inc. (NASDAQ:EXEL) and Vertex Pharmaceuticals Incorporated (NASDAQ:VRTX). However, keep in mind that Exelixis and Vertex have not achieved sustained profitability yet and as a result are still considered speculative. Therefore, I recommend that you invest accordingly.

Due to the amazing return potential within the biotech industry, I recommend developing a basket of at least five biotech positions to be included as part of a diverse, well-managed portfolio. At least two of these positions should be in established companies such as Celgene, and at least three should be smaller positions in speculative companies with multibagger potential, such as Exelixis, Inc. (NASDAQ:EXEL) and Vertex.

The article Want Multibaggers? Consider These 3 Biotech Companies originally appeared on Fool.com and is written by Greg Williamson.

Greg Williamson owns shares of Vertex Pharmaceuticals (NASDAQ:VRTX), Exelixis, and Celgene. The Motley Fool recommends Celgene, Exelixis, and Vertex Pharmaceuticals. The Motley Fool owns shares of Exelixis.

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