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And of course, Moderna Inc. (NASDAQ: MRNA) shareholders have put away as much as 516%.
Clearly, developing effective vaccines against a deadly, disruptive global pandemic is bullish for your stock. Of course, as we've seen this week, these companies are particularly vulnerable to conflicting or negative headlines; one anecdotal report of a possible adverse reaction can send a stock hurtling lower.
Nevertheless, I hear from a lot of folks who feel like they've missed the boat because they weren't early to this small handful of stocks.
So I'll tell you what I tell them: You have not missed the boat, not by a long shot. Besides, most of the upside in those companies has, for the moment, been realized.
Granted, there are other companies out there with apparently effective coronavirus vaccines in late-stage trials. But the company I'm thinking of is really more of a classic "pick and shovel" play on the vaccines themselves. Not just vaccines, either – all kinds of next-generation therapies on the market and in the pipeline.
In fact, it's practically at the epicenter of a market that's on pace to be worth $456.8 billion by 2027.
Put this stock at the top of your "must buy" list for the week ahead…
There's a New Class of Medicines Out There
To understand the immense potential in our hands, it helps to have a very brief overview of prescription drugs.
See, for the longest time, drug research was mostly an exercise in chemistry. Developers would isolate or combine small molecules to create an effective new compound; that's how we've come up with the so-called "small molecule drugs" to combat depression, heart disease, hepatitis, and a huge range of other conditions.
Small-molecule drugs have achieved incredible results, but over the past several years, researchers have really hit paydirt with biologics.
These are still chemical molecules, of course – everything is. But these are much more complex than small-molecule drugs.
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They are essentially grown. They're based on antibodies against specific pathogens, extracted from living tissue, and then purified, altered, and cloned. Biologics include all kinds of vaccines, blood and organ transfers, gut bacteria that improve health, stem-cell therapies, even insulin.
In short, biologics are medicines that are made in or extracted from a living cell, be it a microorganism, plant, or animal cell.
Monoclonal antibodies (mAb) are antibodies made by cloning a unique white blood cell. They've been especially useful when it comes to changing our own immune systems – whether to stop it from attacking our own bodies in autoimmune diseases or to "wake it up" in cancers.
As of 2020, there were more than 120 FDA-approved monoclonal antibodies, and 630 trials underway.
But, times being what they are, a great deal of monoclonal antibody research and development is being directed at fighting COVID-19, whether stopping the spread with a vaccine, or giving potentially lifesaving medicines to folks who are currently fighting the disease.
But there's a problem…
Tackling the Biggest Challenges in the COVID-19 Fight
Because biologics are cloned or developed from and in living sources, making them is a very, very different challenge than simply synthesizing a small-molecule drug.
Clearly, there's a huge, global demand for coronavirus treatments and vaccines. But it takes specialized equipment to keep labs in the perfect condition for the antibodies to grow, to filter out the desired drugs from the mix, and to analyze them to make sure they're exactly right.
That's where today's pick, Repligen Corp. (NASDAQ: RGEN), comes in. Founded in 1981, Repligen sells the equipment and services that biologics makers and developers need to create more of their drugs at a lower cost and with less waste.
It really is a "pick and shovel" vaccine play, and a critically important one, given how far vaccine supply lags demand.
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For example, Repligen has created a resin, which it's set to start selling this year, that specifically binds to a protein on the coronavirus. Using this resin will speed up the production of COVID-19 vaccines as well as increase the yield.
It makes a key substance needed to purify the vaccines, too. Growing the biologics that can attack and kill cancer cells or coronaviruses, or slow down autoimmune diseases, requires a compound known as Protein A.
Today, over half of the world's monoclonal antibodies are purified using Protein A fermented in huge vats by Repligen, particularly the antibodies that have shown so much promise for helping severely ill COVID-19 sufferers.
These folks also provide the specialized tanks, filters, and pumps needed to set up chains that can turn a single growing virus, yeast, or other cell on one end into a vaccine, a gene-therapy virus, or an antibody on the other.
And while there are only nine gene and stem-cell therapies currently approved by the FDA, there are more than a thousand trials going on for more.
This Company Is in the Perfect Spot
Repligen's leading position here will be a huge growth driver, but it's totally insulated from the risk associated with researching new drugs, running trials, dealing with adverse events, and seeking regulatory approval. The road from drawing board to patients' arms is a minefield for drugmakers.
The payoff has been huge. Over the past three years, Repligen's earnings growth has averaged 35%, meaning they double in just over two years – and that's a conservative forecast, because, in the most recent quarter, the company said per-share profits jumped an amazing 160%. That growth was aided in no small measure by its work with the novel coronavirus.
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About the Author
Michael A. Robinson is a 36-year Silicon Valley veteran and one of the top tech and biotech financial analysts working today. That's because, as a consultant, senior adviser, and board member for Silicon Valley venture capital firms, Michael enjoys privileged access to pioneering CEOs, scientists, and high-profile players. And he brings this entire world of Silicon Valley "insiders" right to you...
- He was one of five people involved in early meetings for the $160 billion "cloud" computing phenomenon.
- He was there as Lee Iacocca and Roger Smith, the CEOs of Chrysler and GM, led the robotics revolution that saved the U.S. automotive industry.
- As cyber-security was becoming a focus of national security, Michael was with Dave DeWalt, the CEO of McAfee, right before Intel acquired his company for $7.8 billion.
This all means the entire world is constantly seeking Michael's insight.
In addition to being a regular guest and panelist on CNBC and Fox Business, he is also a Pulitzer Prize-nominated writer and reporter. His first book Overdrawn: The Bailout of American Savings warned people about the coming financial collapse - years before the word "bailout" became a household word.
Silicon Valley defense publications vie for his analysis. He's worked for Defense Media Network and Signal Magazine, as well as The New York Times, American Enterprise, and The Wall Street Journal.
And even with decades of experience, Michael believes there has never been a moment in time quite like this.
Right now, medical breakthroughs that once took years to develop are moving at a record speed. And that means we are going to see highly lucrative biotech investment opportunities come in fast and furious.
To help you navigate the historic opportunity in biotech, Michael launched the Bio-Tech Profit Alliance.
His other publications include: Strategic Tech Investor, The Nova-X Report, Bio-Technology Profit Alliance and Nexus-9 Network.