If you missed the chance to get in early on coronavirus vaccine stocks, don’t worry.
It’s not too late.
Of course, investing in a “pure-play” at this point in the market cycle dogged by so many conflicting headlines could be pretty risky.
Any resistance from the FDA for a new vaccine and the maker’s stock could get pummeled.
I’ve seen it happen before and I can nearly guarantee it will happen again.
That’s why I’m excited to reveal a biotech supply firm that’s involved in developing and producing coronavirus vaccines.
Even better, this is a rare twofer – this supply firm isn’t just focused on new vaccines. It works with a huge swath of the biotech sector.
Its forte puts it squarely in a market that is on pace to be worth $456.8 billion.
Not only that, but this savvy leader is on pace to double its earnings in the next two years…
Living Medicine
To understand the huge potential at hand here, it helps to have a very brief overview of prescription drugs.
See, for the longest time, it was mostly about chemistry. Developers would isolate or combine molecules to create an effective new compound.
That’s how we came up with drugs to fight polio, mumps, and measles, for example.
But over the last several years, the industry has hit pay dirt with a field known as biologics.
Of course, they’re still chemicals, just like aspirin, quinine, and penicillin are.
But they are much, much more complex things than those drugs.
They are grown.
That’s because they are based on antibodies against specific pathogens, extracted from living tissue, and then purified, altered, and cloned.
Other biologics include all kinds of vaccines, blood and organ transfers, gut bacteria that improve health, stem-cell therapies, even insulin.
In short, biologics are medicines that are made in or extracted from a living source, usually a microbe of some sort.
They’ve been especially useful when it comes to changing our own immune systems – whether to stop it from attacking our own bodies in autoimmune diseases or to wake it up in cancers.
As of 2020, there are more than 120 FDA-approved monoclonal antibodies, and 630 trials underway.
Meeting Demand
There’s a fortune at stake here. See, Coherent Market Insights says the biologics market will hit $456.8 billion by 2027. That’s up from $255.2 billion in 2019.
Over the past year, of course, biologics have been in the spotlight for a very different reason.
They make up every single current Covid vaccine, as well as the antibody treatments that help those suffering from severe cases of the disease.
But because biologics are grown or cloned in living sources, making them is a very different challenge than synthesizing a drug.
It takes specialized equipment to keep labs in the perfect condition for the microbes to grow, to filter out the desired drugs from the mix, and to analyze them to make sure they’re exactly right.
That’s why today, I want to tell you about Repligen Corp. (RGEN).
Founded in 1981, Repligen sells the equipment and services that biologics makers and developers need to create more of their drugs at a lower cost and with less waste.
For example, Repligen has created a resin that specifically binds to a protein on the coronavirus.
Using this resin promises to speed up the production of Covid vaccines as well as increase the yield.
Building Blocks
Make no mistake. This is a vital move because vaccine production continues to seriously lag demand.
Repligen is set to start selling this resin this year. It makes a key substance needed to purify the vaccines. Like I said earlier, this is a great biotech supply firm with a lot of upside ahead.
The firm also provides the specialized tanks, filters, and pumps needed to set up chains that can turn a single growing virus, yeast, or other cell on one end, into a vaccine, a gene-therapy virus, or an antibody on the other.
And while there are only nine gene and stem-cell therapies currently approved by the FDA, there are more than a thousand trials going on for more.
Repligen’s leading position here will be a huge growth driver.
But the firm also provides the compounds needed to grow these biologics.
Take the production of those monoclonal antibodies that are given to kill cancer cells, Covid viruses, or to slow down autoimmune diseases, for example. Growing these biologics requires a compound known as Protein A.
Well, today over half of the world’s monoclonal antibodies are purified using Protein A fermented in huge vats by Repligen.
Of vital concern to both patients and investors is the fact that these antibodies are used to treat severe cases of Covid.
And as the supplier to the biopharma companies, Repligen makes money without the risk associated with researching new drugs and seeking FDA approval.
The payoff has been huge. Over the past three years, earnings growth has averaged 35%, meaning they double in just over two years.
But the good news doesn’t end there.
In the most recent quarter, the company said per-share profits jumped an amazing 160%, aided in no small measure by its Covid-related work.
So, you can see why I say an earnings double in two years or so is actually a conservative forecast.
Add it all up and you have the makes of a great biotech stock that can really boost the value of your net worth.
Cheers and good investing,
— Michael A. Robinson
Source: Strategic Tech Investor