We recently published a list of 10 Best Biotech Stocks To Buy Under $20. In this article, we are going to take a look at where Maravai LifeSciences Holdings, Inc. (NASDAQ:MRVI) stands against the other best biotech stocks to buy under $20.
The biotechnology industry is experiencing rapid growth, driven by increasing demand for innovative treatments, technological advancements, and government support. The aging population and rising healthcare needs are creating a strong market for new therapies, while breakthroughs in areas like gene editing, sequencing, personalized medicine, and AI are enabling the development of novel approaches. Between 2019 and 2021, venture capital firms invested over $52 billion in therapeutic-focused biotech companies worldwide. Of this total, two-thirds was allocated to start-ups with platform technologies.
By addressing critical unmet medical needs, biotech companies are transforming healthcare with groundbreaking therapies. A key development in this space is the launch of the National Bioeconomy Board as part of Biden’s Investing in America agenda. It aims to harness the potential of biotechnology for the U.S. economy.
In addition to this, the National Security Commission on Emerging Biotechnology is developing policy recommendations to streamline the regulatory process for biotechnology products. By lowering barriers to entry, more researchers can leverage biotechnology for agricultural applications, supporting U.S. farmers and improving food security. These efforts are expected to create new market opportunities.
Also Read: 10 Largest Biotech Hedge Funds and Their Top Stock Picks
Market Growth Forecast
The biotechnology industry has seen an increase in mergers and acquisitions activity, along with expectations of declining interest rates which have contributed to a strong start in 2024. As a result, projections indicate the global biotechnology market could reach an impressive $5.7 trillion by 2033, growing at a compound annual growth rate (CAGR) of nearly 14% from 2024 to 2033. Even the agricultural biotechnology market is forecasted to grow at a 7.9% CAGR, reaching a market value of $232 billion by 2032.
However, despite the market’s potential, significant risks remain when investing in biotech companies. A failure to meet clinical trial endpoints or secure sufficient funding before a product launch can lead to bankruptcy. The risk of failure is especially high in the biotech sector, where drug development typically takes over a decade and has an estimated failure rate of around 90%.
Hence, biotech stocks are often considered “high-risk, high-reward” investments due to their upside potential coupled with significant risks. If you’re interested in exploring this sector, a good strategy might be to focus on promising but cheap biotech stocks.
Our Methodology
To identify the top biotech stocks to buy under $20, we analyzed the biotech companies that were most popular among hedge funds as of Q2 2024 and traded under $20. Analysts are optimistic about these companies due to their potential to deliver strong returns for investors. Drawing from Insider Monkey’s comprehensive database of over 900 hedge funds, we ranked the best biotech stocks under $20 in ascending order based on their popularity among hedge funds as of Q2, 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).
A researcher in a laboratory coat working with laboratory equipment for nucleic acids.
Maravai LifeSciences Holdings, Inc. (NASDAQ:MRVI)
Number of Hedge Fund Holders: 28
Price: $8.25
Maravai LifeSciences Holdings, Inc. (NASDAQ:MRVI) is a life sciences company that provides products for drug development, diagnostics, vaccines, and human disease research. It has two segments namely Nucleic Acid Production and Biologics Safety Testing. The company serves biopharmaceutical companies, research organizations, and in vitro diagnostics companies.
Maravai LifeSciences Holdings, Inc. (NASDAQ:MRVI) is a key player in nucleic acid production, which is critical for the development of therapies, vaccines, and diagnostics. This segment has shown strong growth, aided by new partnerships and facility expansions, particularly the upcoming Flanders 2 facility, which is expected to increase production capacity.
Maravai LifeSciences Holdings, Inc. (NASDAQ:MRVI)’s focus on innovation, its expanding product portfolio, and the operational efficiencies gained through strategic investments position it well for continued growth. The stock has received an average rating of Moderate Buy with a price target of $11.
Here’s what RGA Investment Advisors said about Maravai LifeSciences Holdings, Inc. (NASDAQ:MRVI) in its Q1 2024 investor letter:
“We first purchased shares of Maravai LifeSciences Holdings, Inc. (NASDAQ:MRVI) early in Q3 of 2023. Much like our experience with META in 2022, almost immediately following our first purchases, the stock’s price tumbled. Given Maravai is a small cap, with a fairly illiquid float and volatile shares, we started our position on the smaller side. As the stock continued to stay weak, we used this as an opportunity to meaningfully increase our holding, much as we had done with META.
Maravai first hit public markets in late 2020 on the heels of its phenomenal success in helping the Pfizer/BioN-Tech mRNA vaccine approach commercial launch. Maravai was formed as a holding company backed by private equity firm GTCR. Its two key subsidiaries are TriLink Biotechnologies and Cygnus Technologies, in the Nucleic Acid Production (NAP) and Biologics Safety Testing (BST) segments respectively. TriLink is the subsidiary whose capabilities formed a critical piece of the Pfizer/BioNTech vaccine, while Cygnus is one of the most important quality control companies for the manufacturing of biologics. Each is an incredibly unique asset…”
Overall, MRVI ranks 8th among the 10 best biotech stocks to buy under $20. While we acknowledge the potential of MRVI as an investment, 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 MRVI but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
