Momenta Pharmaceuticals, Inc. (MNTA), Incyte Corporation (INCY), Solazyme Inc (SZYM): Three Biotech Companies for Young Investors

With a market cap of just $3 billion and plenty of positive developments, Incyte Corporation (NASDAQ:INCY) could be a good early candidate for the next big biotech company. Investors will have to practice extreme patience, though, since the next phase 3 data won’t be published for several years.

You call it cheating — I call it looking ahead
Who said biotech investments are confined to health care and pharmaceuticals? Solazyme Inc (NASDAQ:SZYM) has nothing to do with either, but forward-thinking investors won’t let that stop them. The industrial biotechnology company is developing a novel renewable oils platform that could one day produce commercial quantities of in-spec chemicals for a variety of applications including cosmetics, flavors and fragrances, specialty chemicals, and fuels.

Solazyme Inc (NASDAQ:SZYM) is feverishly working on building its first production capacity in Brazil, the United States, and Europe. When the last of the three facilities is commissioned in early 2014, the company will own an annual nameplate oils capacity of 125,000 metric tons. With just 8,500 metric tons of capacity at the beginning of 2013, it is easy to see why investors are excited about the big increases in revenue coming their way.

Potential will likely push shares higher over the next year, although Solazyme Inc (NASDAQ:SZYM) still needs to commercialize all of it oils at industrial levels of production to become profitable. The company hasn’t missed any major milestones to date, but it’s clear that big challenges lie ahead. Despite the risks, Solazyme Inc (NASDAQ:SZYM) remains the best investment in industrial biotechnology.

Foolish bottom line
Will one of these companies become the next big biotech company? It is much too early to say, but young investors looking for great buy-and-hold opportunities should consider the innovative group. Each comes with more risks than more mature companies such as Celgene, Biogen, or Gilead, but that also makes the potential returns far greater. All three are on my watchlist and will be added to my portfolio in the next year. Will you be joining me? Let me know in the comments section below.

The article 3 Biotech Companies for Young Investors originally appeared on Fool.com and is written by Maxx Chatsko.

Fool contributor Maxx Chatsko has no position in any stocks mentioned. Check out his personal portfolio, his CAPS page, or follow him on Twitter @BlacknGoldFool to keep up with his writing on energy, bioprocessing, and emerging technologies. The Motley Fool recommends Momenta Pharmaceuticals. The Motley Fool owns shares of Momenta Pharmaceuticals and Solazyme.

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