Start the conversation
There's no sugarcoating it: Biotech stocks have had a rough run recently. The iShares Nasdaq Biotechnology Index (Nasdaq: IBB) has slipped 12% in the last month.
But that doesn't mean there aren't quality drug stocks to buy now…
You see, while other investors bail on biotech, Money Morning experts are finding profit plays. Right now presents an excellent buy-in opportunity on valuable drug companies.
"What's happening is investors have gotten nervous," Money Morning's BioScience Investment Specialist Ernie Tremblay said. "They're not sure of the high valuations they have assigned to these young companies. They're questioning their own judgment. And in a moment of somewhat panicky behavior, they're selling their uncertainty."
And investors leaving the biotech sector now will miss out on profits when the market inevitably turns back around.
"Eventually, the market will wake up and come to realize that high valuation is healthy for the bioscience sector, that it sustains research and brings exciting new medicines to patients who need them," Tremblay said. "And the current trend will reverse direction powerfully."
When the biotech market "wakes up" like Tremblay says, there will be huge profits to be made. And one particular area is full of good stocks to buy now…
Orphan Drug Makers Are Among the Best Stocks to Buy Now
By definition, "orphan drugs" treat diseases that affect fewer than 200,000 people in the United States.
For years, drug companies avoided developing treatments for rare maladies, as the market size was so small. Things changed in 1983, when the United States passed the Orphan Drug Act and began granting orphan drugs seven years of market exclusivity, compared to the five years of exclusivity traditional drugs get.
Because these diseases are so rare, orphan drugs can be incredibly expensive. Some orphan drugs cost more than $200,000 per person, per year.
Soliris, produced by Alexion Pharmaceuticals Inc. (Nasdaq: ALXN), is the world's most expensive drug. The treatment for the rare condition paroxysmal nocturnal hemoglobinuria costs users approximately $440,000 per year.
Not surprisingly, Alexion projects it will bring in $2 billion in revenue from Soliris alone in 2014.
With such huge revenue totals, and extended periods of market exclusivity, orphan drug stocks are some of the most lucrative on the market – if you know where to look. Here are three orphan drug stocks to buy now…