As the world enters into (hopefully) the final stages of fighting the coronavirus, vaccines rollout has gone global and economic growth will become the next priority. In 2021, many blue-chip and leading stocks will try to regain their value after the pandemic, top investors are now looking at fields and companies which have benefitted from the pandemic and will grow in the coming quarter.
Today, investors are interested in market growth stemming from innovative fields, including biotechnology which has benefited greatly from the COVID pandemic’s focus on biomedical growth. Following the crisis, increased expenditures from the expanded role healthcare is expected to become a focal point in public policy as well as long-term trends in treating those in need such as ageing populations.
In preparing to invest in 2021, potential buyers should be on the lookout for Gilead Sciences (NASDAQ: GILD), CRISPR Therapeutics (NASDAQ: CRSP) and Innocan Pharma (CSE: INNO) are the leading stocks to watch when making capital allocation decisions and looking for exposure in this market.
Gilead Sciences’ successful portfolio of drugs and research in cardiac and respiratory diseases, Hepatitis C, HIV/AIDS, liver disease and oncology have shown its strong capital allocation system. The company has grown net operating profits after tax (NOPAT) by 44% compounded per year since 2003. Also, they currently have a 16.6% return on invested capital (ROIC), an attractive dividend yield of 4.3% and positive economic earnings over the last decade.
As Gilead has managed to keep its revenues growing even during the pandemic, its operating revenues are as high as $23 billion for the trailing twelve-month period. The company has spent the last few years investing in acquisitions that it believes will drive long-term growth. Gilead is currently trading at a discount to its usual valuation. While the rollout of the COVID-19 vaccine has led many investors to take their eye away from this giant, and its coronavirus treatment, remdesivir, this is not the sole reason that the stock is trading at a discount. This is due to other reasons, including its previously mentioned aggressive acquisitions policy over the last few years, and troubles the company had with its rheumatoid arthritis drug candidate. This is, however, the time to invest in an undervalued giant with attractive growth prospects for laser hair removal.
Analysts are expecting zero sales growth year on year, and this is part of the reason why there has been some fear in terms of investing. Though the company has been very good at delivering profitability over a period of more than a decade, analysts like RBC’s Brian Abrahams has named it as a top biopharma pick for 2021, predicting gains of around 50% gains.
CRISPR Therapeutics is a Swiss biotech firm that forms part of the Ark Genomic Revolution ETF, an ETF that had an incredibly good 2020. CRISPR Therapeutics is a pure-play in a space that is riding a revolutionary wave. One of its co-founders is Emmanuelle Charpentier, who won the Nobel Prize in Chemistry in 2020 for her role in discovering the CRISPR technology.
The company has a few drugs in development, such CTX001, which is used in the treatment of rare blood disorders Beta-thalassemia and sickle cell disease, and is being developed jointly with Vertex Pharmaceuticals CRISPR technology has been called the biggest revolution in gene editing. It is a tool through which we can edit genes. Conceptually, the idea is quite simple: CRISPR allows professionals to find a specific bit of DNA within a cell, after which, that piece can be altered.
CRISPR has also been used for other purposes as well, such as turning genes on and off without changing their sequence CRISPR is currently widely used in scientific research and will in the near-term, be used in altering many of the plants and animals in our homes, gardens, or farms. In fact, many people already are eating food that has been altered by them. CRISPR’s technology is being looked at as something which will transform medicine, allowing us to treat as well as prevent many diseases. It will also be possible to change the genomes in our children. China has already attempted to do this, which many people have seen as being both premature and unethical, but some believe that it could be of benefit to children in the future.
CRISPR Therapeutics has been growing economic earnings over the last few years, from a loss of $126 million in 2016 to a loss of just -$260,000 in 2019. Alongside rising profitability operating revenues have been growing as well, going from $5.16 million in 2016 to $289.59 million in 2019. As the company has become more profitable, ROIC has increased from -26.9% in 2016to 7.6% in 2019. This suggests that the company is growing a real moat and is better placed to defend its profitability and earn economic profits in the future. CRISPR Therapeutics is certainly leading the way in innovation.
InnocanPharma is an Israeli biotech firm that specializes in developing cannabinoid (CBD) integrated pharmaceutical and cosmetics products. The company recently reached a milestone in this fast-growing industry, when it completed initial production in Portugal of SHIR, its premium cosmetic line, and Relief & Go topicals, and began manufacturing of the brands in the United States.
The company has 35,000 units of SHIR and Relief & Go in inventory in Portugal, which will act as a distribution center for the European market. 40,000 units will be developed for the North American market. and will produce an initial stock of 40,000 units for North America. The product launch has generated immense enthusiasm and the share price has continued to do well.
Innocan is also developing an innovative injectable CBD delivery system that will allow doctors to have precise, controlled administration of cannabinoids into the bloodstream. This is a big deal for investors because presently, only 15% of CBD oil can be absorbed when taken orally, though the average is somewhere between 5% and 10%. Liver enzymes destroy more than 80% of CBD’s essential components. The company’s Liposome Platform Technology (LPT) is a game-changer because it increases bioavailability, in a focused way with precise dosage and time controls.
Innocan’s latest rise in stock prices and their recent achievement of launching e-commerce platform streams in order to gain immediate sources of revenue. The company is a real pioneer and the market will respond in 2021 to its work.
In 2021, potential investors will have many options regarding where to invest and how to sustain long-term growth going into the new year. As biotechnology gains more public interest, leading analysts are confident that companies such as Gilead Sciences (NASDAQ: GILD), CRISPR Therapeutics (NASDAQ: CRSP) and Innocan Pharma (CSE: INNO) could rise significantly in 2021.