In this article, we will be discussing the best gene therapy stocks to buy now. Before we move on to our list, let’s take a look at the market outlook for gene therapies and understand the reasons behind the increasing investor interest in the industry. You can also check out the 15 Most Profitable Biotechnology Companies in the World.
Gene therapy involves treating illnesses by modifying, replacing, or supplementing faulty or missing genes responsible for a disease. This approach has become a research focus area in fighting degenerative illnesses. The growing incidence of cancer and other chronic diseases worldwide is increasing the demand for gene therapy.
In 2023, the global gene therapy market reached a valuation of $7.74 billion. The market is expected to expand at a compound annual growth rate (CAGR) of 19.6% to reach a value of $38.76 billion by 2032. In 2022, North America led the global gene therapy market in terms of revenue and is expected to maintain this dominance throughout the forecast period. This leadership can be credited to the strong regulatory framework for developing cellular treatments and the presence of many biopharmaceutical companies in the region.
Meanwhile, Europe is expected to offer the most opportunities for growth in the gene therapy market in the coming years. Some factors driving this growth include advanced healthcare infrastructure and the availability of reimbursements across the continent.
As far as the vector types are concerned, the viral vector segment dominated the market in 2022 by capturing over 85% of the revenue share. This was due to advancements in physiochemical methods for gene therapies during preclinical and clinical trials aimed at treating various diseases. As these developments continue, the viral vector segment is projected to experience rapid growth in the following years.
Cathie Wood’s Confidence in Gene Therapy
The gene editing market has now gained mainstream attention and is attracting many famous investors. A prominent hedge fund investor, Cathie Wood, has shown strong confidence in this industry. Wood has been actively investing in innovative gene editing companies for many years.
Investors are becoming increasingly familiar with the term “CRISPR” – Clustered Regularly Interspaced Short Palindromic Repeats – as the industry sees an increase in companies using CRISPR-based technologies. According to a report by Cathie Wood’s ARK Invest, CRISPR can be considered the “breakthrough of the century.”
ARK Invest expects that CRISPR technology will soon show its potential in the agriculture sector and offer opportunities to improve the food supply. Meanwhile, in the field of medicine, CRISPR technology’s potential market for treating monogenic diseases is estimated at over $75 billion annually.
With this context in mind, let’s move on to our list of the best gene therapy stocks in 2024.
A scientist carefully examining a petri dish containing a rare disease’s gene therapy.
Our Methodology
To shortlist the best gene therapy stocks, we analyzed Insider Monkey’s database of 919 hedge funds as of Q1 2024. From this extensive dataset, we selected gene therapy companies that received significant interest from hedge fund investors. Our aim was to identify gene therapy stocks that hedge funds are particularly optimistic about. Furthermore, we looked at companies with strong product pipelines, positive analyst ratings, and high price targets to shortlist the most promising gene therapy stocks. The best gene therapy stocks have been ranked in ascending order of the number of hedge fund investors as of the first quarter of 2024.
“Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).”
9 Best Gene Therapy Stocks to Buy Now
9. Intellia Therapeutics, Inc. (NASDAQ:NTLA)
Number of Hedge Fund Holders: 29
Intellia Therapeutics, Inc. (NASDAQ:NTLA) is a clinical-stage biotechnology firm based in the United States. The company specializes in the development of innovative therapeutic solutions that use CRISPR-based technologies.
The company’s first program using CRISPR-based gene insertion, NTLA-3001, is forecasted to start human clinical trials this year. NTLA-3001 shows promise in restoring normal alpha-1 levels with just one treatment for patients with alpha-1 antitrypsin deficiency.
Moreover, Intellia Therapeutics, Inc. (NASDAQ:NTLA) plans to start patient dosing for a second clinical program too, this year. This program will focus on hemophilia B and use the company’s modular gene insertion platform in collaboration with Regeneron.
In its Q1 2024 earnings call, Intellia Therapeutics, Inc. (NASDAQ:NTLA) reported cash equivalent and marketable securities of $953.4 million. Meanwhile, the company’s collaboration revenue was recorded at $28.9 million during Q1, up from $12.6 million in the same period last year.
Overall, analysts are bullish on Intellia Therapeutics, Inc. (NASDAQ:NTLA) and think that the stock price could increase by over 150% this year. The bullish outlook is primarily being driven by the company’s two key expected phase 3 clinical trials this year. Intellia Therapeutics, Inc. (NASDAQ:NTLA) is being considered as one of the best gene editing companies.
As of Q1 2024, 29 hedge funds reported owning a stake in Intellia Therapeutics, Inc. (NASDAQ:NTLA), up from 28 in the previous quarter. ARK Investment Management is the leading hedge fund investor in the company, with a stake of over $302 million.
8. Taysha Gene Therapies, Inc. (NASDAQ:TSHA)
Number of Hedge Fund Holders: 32
Taysha Gene Therapies, Inc. (NASDAQ:TSHA) is a biotechnology company that is working on gene therapies based on adeno-associated virus (AAV). These therapies are meant to treat monogenic diseases affecting the central nervous system.
Taysha Gene Therapies, Inc. (NASDAQ:TSHA) has made progress with TSHA-102, its leading gene therapy program for Rett Syndrome. This progress includes reporting positive long-term data for the first two adult patients in the low-dose cohort. Furthermore, the company has also enrolled its first patient in the high-dose cohort of the REVEAL Phase I/II trial for adolescents and adults ahead of schedule.
Analysts recently assessed Taysha Gene Therapies, Inc. (NASDAQ:TSHA) and shared their 12-month price targets. The average target price came out to be $6.94, with a low estimate of $5 and a high estimate of $9. This new average reflects a 46.11% increase from the previous average target of $4.75, reflecting the overall bullish outlook on the stock.
As of Q1 2024, 32 hedge funds held a stake in Taysha Gene Therapies, Inc. (NASDAQ:TSHA). The stock ranks eighth on our list of best gene therapy stocks to buy now.
7. Moderna, Inc. (NASDAQ:MRNA)
Number of Hedge Fund Holders: 32
Moderna, Inc. (NASDAQ:MRNA), headquartered in Cambridge, Massachusetts, is a pharmaceutical and biotechnology company specializing in RNA-based therapies.
Three years ago, Moderna, Inc. (NASDAQ:MRNA) announced its entry into the rapidly growing field of gene editing. The company established a new division, Moderna Genomics, and formed a partnership with Metagenomi, which was a startup focused on creating innovative gene-editing enzymes.
While, recently, Moderna, Inc. (NASDAQ:MRNA) announced that it had ended this collaboration with Metagenomi, the company continues to be active in the gene editing space through other collaborations. In February 2023, Moderna, Inc. (NASDAQ:MRNA) entered into a gene-editing partnership with Life Edit Therapeutics. Shortly after, the company also signed a second genetic medicine deal with Generation Bio.
In Q1 2024, Moderna, Inc. (NASDAQ:MRNA) reported revenues of $167 million, higher than the expected $97.5 million. For this year, analysts predict that Moderna (MRNA) will see a 39.4% reduction in its loss per share. The company has a strong track record of exceeding expectations and has surpassed the consensus earnings estimate in each of the last four quarters.
UBS analyst Eliana Merle also recently reiterated a “Buy” rating on Moderna, Inc. (NASDAQ:MRNA) stock and increased the price target from $143 to $151.
As of Q1 2024, the stock was held by 32 hedge funds.
6. Krystal Biotech, Inc. (NASDAQ:KRYS)
Number of Hedge Fund Holders: 34
Krystal Biotech, Inc. (NASDAQ:KRYS) is a biotechnology firm that is working on developing genetic medicines to treat rare diseases. Leveraging its proprietary redosable HSV vector, the company has a wide pipeline of potential treatments.
At the close of the first quarter, Krystal Biotech, Inc.’s (NASDAQ:KRYS) cash reserves stood at $359 million, with total cash and investments amounting to $622 million. This reflects a $28 million increase from the year-end cash and investments.
Meanwhile, the net product revenue for the company’s first FDA-approved gene therapy treatment for dystrophic epidermolysis bullosa reached $45.3 million during Q1. The cost of goods sold amounted to $2.4 million, representing approximately 5% of net product revenue. This resulted in a healthy gross margin of 95%.
Overall, 34 hedge funds are bullish on the company. Here’s what TimesSquare Capital Management said about Krystal Biotech, Inc. (NASDAQ:KRYS) in its Q3 2023 investor letter:
“New to the strategy was Krystal Biotech, Inc. (NASDAQ:KRYS), a commercial-stage biotechnology developer of topical therapies for skin diseases. Its current treatment, Vyjuvek, was recently approved for dystrophic epidermolysis bullosa, a genetic condition often appearing at early ages that causes severe blistering in the middle skin layers. From our research, we expect the commercial launch to be successful, especially given the lack of other therapies.”
5. Exact Sciences Corporation (NASDAQ:EXAS)
Number of Hedge Fund Holders: 48
Exact Sciences Corporation (NASDAQ:EXAS), headquartered in Madison, Wisconsin, specializes in molecular diagnostics, particularly in the detection of early-stage cancers. Exact Sciences Corporation (NASDAQ:EXAS) is among the top 5 best gene therapy stocks to buy now.
One of the company’s main products is Cologuard, a non-invasive test that uses stool-based DNA screening to identify biomarkers linked to colorectal cancer and pre-cancer.
In the first quarter of 2024, Exact Sciences Corporation (NASDAQ:EXAS) recorded revenue of $638 million, marking a 6% growth on a reported and core revenue basis. Meanwhile, screening revenue saw a 7% increase, reaching $475 million.
The average price target for Exact Sciences Corporation (NASDAQ:EXAS) is $82, as per the projections of 13 analysts from Wall Street over the past 3 months. Among these, the highest price target is $100, while the lowest forecast stands at $51. On average, this implies an 81.2% upside from the current stock price of $45.25.
Here’s what Artisan Partners said about Exact Sciences Corporation (NASDAQ:EXAS) in its Q1 2024 investor letter:
“Among our top detractors were Atlassian, ON Semiconductor and Exact Sciences Corporation (NASDAQ:EXAS). Exact Sciences is a leading provider of diagnostic testing and a maker of the noninvasive colorectal cancer screening test Cologuard. The company reported another solid quarter with revenues growing 18% and, importantly, screening (Cologuard) revenues growing 21%. However, growing optimism around a competing blood-based test has led to competitive fears among investors and corresponding performance weakness. Our view has been that blood tests, while potentially more convenient, have historically been unable to match the accuracy of stool testing (especially when it comes to detecting early cancers). Shortly after the quarter entered, new blood test data from a private competitor (Freenome) supported our views. Its test demonstrated 79% sensitivity for detecting colorectal cancer versus Cologuard 2.0’s 94% sensitivity.”
4. Gilead Sciences, Inc. (NASDAQ:GILD)
Number of Hedge Fund Holders: 55
Based in Foster City, California, Gilead Sciences, Inc. (NASDAQ:GILD) is a leading American biopharmaceutical company. Its primary focus lies in the research and development of antiviral medications for conditions such as hepatitis B, HIV/AIDS, hepatitis C, and influenza.
On October 31, 2023, Kite, owned by Gilead Sciences, Inc. (NASDAQ:GILD), and Epic Bio agreed to a research collaboration. Under this partnership, Epic Bio’s unique gene regulation platform will be used to develop innovative cancer cell therapies. This partnership allows Kite to use licensed technology to manipulate specific genes to improve the functionality of CAR T-cells.
According to analysis from 24 Wall Street experts within the past 3 months, Gilead Sciences, Inc. (NASDAQ:GILD) has an average 12-month price target of $80.9. Projections range from a high estimate of $105 to a low estimate of $69. This average target indicates a 25.9% upside from the current stock price of $64.27.
Here’s what ClearBridge Investments said about Gilead Sciences, Inc. (NASDAQ:GILD) in its Q4 2023 investor letter:
“In the second half of 2023 — as we were selling low-growth, high-multiple stocks and taking advantage of oversold conditions in infrastructure, real estate and utilities — we also found opportunities in overlooked areas of health care. After adding Gilead Sciences, Inc. (NASDAQ:GILD) in the third quarter, we bought AstraZeneca in the fourth quarter. Each of these stocks present distinct investment cases, but both are reasonably valued and have limited patent expiry or pipeline risk. Gilead’s strength comes from its dominant franchise in HIV. It offers lower growth, but it yields nearly 4% and trades at 11x earnings. AstraZeneca possesses a diversified portfolio of pharmaceuticals, which should deliver double-digit earnings growth, yet it trades at just 16x earnings. These stocks were underwritten individually, but collectively we like the idea of increasing our exposure to defensive and growing health care names at below-market multiples.”
3. Vertex Pharmaceuticals Incorporated (NASDAQ:VRTX)
Number of Hedge Fund Holders: 62
Vertex Pharmaceuticals Incorporated (NASDAQ:VRTX), headquartered in Boston, Massachusetts, is an American biopharmaceutical firm. The company is working on the development and distribution of a wide range of treatments for people with severe illnesses.
In Q1 2024, Vertex Pharmaceuticals Incorporated (NASDAQ:VRTX) recorded $2.7 billion in revenue, marking a 13% increase compared to the previous year. The company started its revenue diversification strategy by introducing CASGEVY for sickle cell disease and beta-thalassemia across various regions. In the late-stage pipeline, Vertex Pharmaceuticals Incorporated (NASDAQ:VRTX) is advancing programs into Phase III and toward regulatory approval.
According to analysts providing 12-month price targets for Vertex Pharmaceuticals Incorporated (NASDAQ:VRTX) in the past three months, the average price target stands at $458, with a high forecast of $550. The stock has a consensus rating of “Strong Buy,” based on 27 analysts’ recommendations.
Here’s what Aristotle Atlantic Partners, LLC said about Vertex Pharmaceuticals Incorporated (NASDAQ:VRTX) in its Q4 2023 investor letter:
“Vertex Pharmaceuticals Incorporated (NASDAQ:VRTX) develops drugs for treating cystic fibrosis, cancer, inflammatory bowel, autoimmune disease and neurological disorders. The biotechnology company has four commercial drugs used to treat cystic fibrosis. Vertex has other drugs in development, including additional cystic fibrosis treatments and medications addressing sickle cell disease, beta thalassemia, alpha-1 antitrypsin deficiency and pain.
Vertex is the global leader in treating cystic fibrosis and has additionally built a robust pipeline in several therapeutic areas. Late-stage studies in acute and neuropathic pain are expected to be another catalyst for the company. We believe Vertex’s valuation is attractive and at a discount relative to their 5-year historical average. Additionally, the company is well capitalized, with roughly $12.5 billion in net cash on its balance sheet.”
2. Regeneron Pharmaceuticals, Inc. (NASDAQ:REGN)
Number of Hedge Fund Holders: 63
Regeneron Pharmaceuticals, Inc. (NASDAQ:REGN) is a biotechnology company, based in Westchester County, New York. The stock ranks second on our list of best gene therapy stocks to buy now.
Regeneron Pharmaceuticals, Inc.’s (NASDAQ:REGN) collaboration with Intellia on CRISPR gene editing is making progress. Patient enrollment has started in the Phase 3 MAGNITUDE study of [Intellia-2001] (ph) for a lead indication of TTR amyloidosis with cardiomyopathy. This is the first in vivo CRISPR program that has been cleared to enter Phase 3 studies in the US. Regeneron Pharmaceuticals, Inc. (NASDAQ:REGN) is also expected to become the first company using CRISPR technology to insert a corrective gene in vivo to treat a deficiency disease.
Furthermore, Regeneron Pharmaceuticals, Inc. (NASDAQ:REGN) aims to introduce more auditory gene therapy programs in the following years. These programs will be treating more common forms of monogenic hearing loss.
Regeneron Pharmaceuticals, Inc.’s (NASDAQ:REGN) average price target is $1,061, taken from 18 analysts’ 12-month projections shared within the last 3 months. The highest target stands at $1,185, while the lowest forecast is $720. On average, this reflects an 8.3% upside potential from the current price of $980.
At the end of Q1 2024, 63 hedge funds reported owning a stake in Regeneron Pharmaceuticals, Inc. (NASDAQ:REGN). D E Shaw is the leading hedge fund investor in the company, with a stake worth over $221 million.
1. Pfizer Inc. (NYSE:PFE)
Number of Hedge Fund Holders: 77
Pfizer Inc. (NYSE:PFE) is a multinational biotechnology and pharmaceutical company, based in Manhattan, New York City.
Recently, Pfizer Inc. (NYSE:PFE) achieved its first US FDA approval for a gene therapy with Beqvez, a one-time treatment for adults with hemophilia B. This milestone has strengthened Pfizer’s position in the hemophilia market.
Moreover, Pfizer Inc. (NYSE:PFE) expects to receive an FDA decision by year-end for Marstacimab. This could be a potential breakthrough as the first once-weekly subcutaneous treatment for hemophilia B.
In Q1 2024, Pfizer Inc. (NYSE:PFE) recorded a 530 basis points improvement, to 79.6%, in its gross margin, in comparison to the same period last year. The company posted an adjusted diluted earnings per share (EPS) of $0.82, surpassing its expectations. Furthermore, Pfizer Inc. (NYSE:PFE) distributed $2.4 billion to the company’s shareholders through the quarterly dividend.
The average 12-month price target for Pfizer Inc. (NYSE:PFE), based on recent assessments by 17 Wall Street analysts, is $32.8. The price targets range from a high of $53 to a low of $27. This average target suggests a potential upside of around 14% from the current price of $28.7.
At the end of Q1 2024, 77 hedge funds reported owning a stake in Pfizer Inc. (NYSE:PFE). The strong hedge fund sentiment, positive analyst ratings, and a healthy product pipeline make Pfizer Inc. (NYSE:PFE) the best gene therapy stock to buy in 2024.
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