We recently compiled a list of the 9 Best Gene Therapy Stocks to Buy Now and in this article, we discuss Gilead Sciences, Inc. (NASDAQ:GILD), which is one of the best gene therapy stocks to buy now.
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.
A medical professional in a lab, analyzing gene therapy solutions toprevent rare diseases.
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).”
Hedge Funds are Bullish on This Gene Therapy Stock
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.”
Overall, Gilead Sciences, Inc. (NASDAQ:GILD) ranks 4th among the 9 best gene therapy stocks to buy now. You can visit 9 Best Gene Therapy Stocks to Buy Now to see the other gene therapy companies that are on the hedge fund radar.
While we acknowledge the potential of gene editing companies, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than NVIDIA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
Read Next: Michael Burry Is Selling These Stocks and Jim Cramer is Recommending These Stocks.
Disclosure. None. This article is originally published on Insider Monkey.
