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One of the last week's biggest IPOs, the food allergy company Aimmune Therapeutics Inc. (Nasdaq: AIMT), hit the market on Thursday, Aug. 6, and has already climbed more than 20%.
AIMT's early success underscores one of the best biotech stocks to buy that Money Morning Executive Editor Bill Patalon has been recommending all year.
Food allergies affect tens of millions around the world. And the companies that treat these people offer some of the best profit opportunities among biotech stocks today…
Food Allergy Companies Offer Some of the Best Biotech Stocks to Buy Now
According to Food Allergy Research & Education Inc. (FARE), more than 15 million Americans suffer from food allergies. In Europe, there are more than 17 million people who are affected.
"If you're talking about children under 18, this very serious malady affects one in every 13 kids – about two in any classroom you walk into," Patalon said.
And people with food allergies frequently suffer from anaphylaxis. It's a rapidly progressing, life-threatening allergic reaction that can result in airway constriction, heart rhythm irregularities, and even intestinal attacks. The most severe cases can put a person into shock – or even kill them.
Anyone with a food allergy, or who knows someone with a food allergy, knows just how scary these attacks can be. And the problem is only growing.
According to the U.S. Centers for Disease Control and Prevention, the number of food allergies in children soared 50% between 1997 and 2011.
"The economic cost of this is nearly $25 billion," Patalon said. "But if you're a parent of one of these kids, that 'cost' runs a distant second to the worry you feel every time your son or daughter buys a school lunch, goes to a friend's birthday party, goes out to eat with others, or snags a snack while at a friend's house."
While AIMT stock is up 20% since hitting the market, now is not the best time to buy into the biotech stock. We usually advise investors to wait until the lock-up period ends before investing in a new IPO. Price fluctuations are impossible to predict for new stocks, and a pullback is common after the stock's initial run-up.
Plus, waiting a quarter or two will allow the company to report earnings and gain some real momentum.
Instead, Patalon has been recommending a food allergy biotech stock that has climbed 28.8% in the last year. That compares to a gain of just 6.4% for the Dow Jones Industrial Average in the last 12 months.
Here's why it's one of the best biotech stocks to buy now…