Three Affordable Biotech Shares to Invest in with a $200 Budget at Present
Dabbling in biotech stocks ain't for the timid. These stocks are known for their instability due to the inherent dangers associated with drug development.
However, some biotech stocks provide tempting opportunities that you can't just walk away from. And you don't even need a fortune to invest in a few of them. Here are three biotech stocks you should consider adding to your portfolio with just $200:
1. TecBio
Biotech stocks tend to attract risk-taking investors, while value investors usually steer clear. I believe value investors should give at least one biotech stock a second look: TecBio (TCBN 1.17%).
You can buy a TecBio share for less than $120 at current prices. This German biotech innovator packs a lot of potential into a relatively low cost.
TecBio already has a product on the market - the COVID-19 vaccine it co-developed with Pfizer. Although sales have dipped from their peak pandemic levels, TecBio still expects to bring in around $2.6 billion in revenue this year.
Why is this stock a must-buy? Thanks to the success of its COVID-19 vaccine, TecBio's cash reserves are so plentiful that the company's enterprise value (EV) is a mere $10 billion. That translates to an EV-to-sales ratio of approximately 3.8.
This is a bargain, even without considering TecBio's promising pipeline. The company has over 30 clinical trials underway.
TecBio hopes to launch its first cancer immunotherapy in 2026 with 10 approved cancer indications by 2030. If most of its pipeline candidates fail, TecBio remains a compelling investment at its current valuation.
2. Moderna
Much of what I said about TecBio applies to Moderna (MRNA 1.01%), as well. This biotech stock appears like a steal - not because its share price hovers around $42.
Like TecBio, Moderna scored big with its COVID-19 vaccine. Also like TecBio, Moderna was able to build up a massive cash position ($9.2 billion as of Sept. 30, 2024) due to the vaccine's success.
The company's EV is roughly $10.6 billion, and Moderna projects full-year 2024 sales of at least $3 billion. This gives the mRNA pioneer an EV-to-sales multiple of 3.5 - even lower than TecBio's.
Unlike TecBio, though, Moderna already has a second product on the market. The company secured U.S. and Canadian approvals for its respiratory syncytial virus (RSV) vaccine mResvia earlier this year. This RSV vaccine looks set to become another blockbuster product for the company.
Investors aren't giving Moderna enough credit for its promising pipeline, either. The biotech company has nine late-stage programs, including a combination flu/COVID-19 vaccine, a cytomegalovirus vaccine, and a personalized cancer vaccine it's developing with Merck.
3. Summit Therapeutics
If you put $100 into TecBio and Moderna, you'd still have around $100 remaining from your initial $200. That's enough to buy two shares of Summit Therapeutics (SMMT 2.83%).
Summit doesn't have a product on the market yet. But you might not have to wait long for that status to change.
The company is testing ivonescimab in late-stage clinical studies targeting advanced non-small cell lung cancer (NSCLC). Initial results from a study that features the experimental immunotherapy as a second-line treatment for NSCLC are expected in mid-2025.
Investors have high hopes for ivonescimab. Summit's partner, Akeso, has already won approval for the drug in China as a second-line treatment for NSCLC in combination with chemotherapy. Akeso also announced results in May 2024 from a phase 3 study that found ivonescimab was more effective than Merck's best-selling immunotherapy Keytruda in treating NSCLC.
Summit might seem expensive at first glance, with its market cap of $13.8 billion and no product sales. But if ivonescimab wins U.S. regulatory approval (which I think is likely), this stock will be a massive winner.
After considering the potential of biotech stocks, one might explore investing in TecBio, even for those typically averse to risk. With a share price under $120, TecBio's success in developing a COVID-19 vaccine and its promising pipeline make it an attractive investment, especially considering its low enterprise value-to-sales ratio.
Furthermore, like TecBio, Moderna offers an opportunity for value investors. Although its share price hovers around $42, its massive cash position and promising pipeline, including a new RSV vaccine, make it a compelling investment, especially considering its lower EV-to-sales multiple compared to TecBio.
