Actionable news
0
All posts from Actionable news
Actionable news in SRPT: Sarepta Therapeutics, Inc.,

3 Risky Biotech Stocks That Could Make You Rich

Image Source: Getty Images

If you're looking for stocks that offer unusual growth opportunities, clinical-stage biotechs are fertile ground. Even among this select group, though, there are only a handful of companies that can realistically transform an initial investment of say $10,000 into a small fortune.

The "trick," if you will, is to identify companies that are either developing, or have recently launched, franchise-level drugs that will allow them to build out a diverse product portfolio over time. The problem is that small companies with promising drugs -- experimental or otherwise -- tend to be bought out long before their full value is realized. What's left over are companies with drugs that tend to have substantial clinical or regulatory hurdles to clear, making them high-risk investing vehicles.

For investors brave enough to continue down this rabbit hole, I think Acadia Pharmaceuticals (NASDAQ:ACAD), Amarin Corp. (NASDAQ:AMRN), and Sarepta Therapeutics (NASDAQ:SRPT)are all worth a deeper dive. Here's why.

1. Acadia's flagship drug could be a megablockbuster

Last April, the FDA gave the green light for Acadia's Parkinson's disease psychosis drug Nuplazid, despite some serious concerns within the agency that it may increase the risk of death. The particularly intriguing part of the story is that Acadia priced its new drug at $23,400 for a year's supply, giving it the potential to generate upwards of $4 billion in peak sales within the U.S. alone. Total sales could rise markedly if Acadia is able to garner additional approvals overseas.

If that occurs, Nuplazid should easily provide enough free cash flows to greatly expand the biotech's clinical activities, and perhaps most importantly, enable it to make a splash on the M&A front. The obvious risk, though, is the ability of a young commercial operation like Acadia's to successfully handle a drug launch. After all, many companies simply decide to either sell themselves outright or sign a licensing agreement upon reaching this stage in their life cycle...


More