Best biotech stocks to buy and hold in 2024: VKTX, SANA, RXRX

Biotech stocks are having a relatively strong year as investors focus on the growing M&A in the healthcare space. Johnson & Johnson is acquiring Shockwave Medical while Novo Nordisk is buying Catalent, a CDMO organization. Pfizer acquired Seagen in 2023 while Merck bought Harpoon Therapeutics. So, here are some of the top biotech stocks to buy.

Viking Therapeutics

Viking Therapeutics (NASDAQ: VKTX) stock price has surged by almost 200% in the past 12 months and by 240% this year. This surge has pushed its total market cap to almost $7 billion, making it one of the best-performing companies in the industry.

Viking Therapeutics has done well because of its weight loss drug that is now being studied. Its testing reports have shown that the drug leads to substantial weight loss, which is a positive thing.

Further, the company has a strong balance sheet with over $360 million in cash and just $1 million in debt. I believe that Viking may become a good takeover target as more large companies move to the weight loss industry. Most of the big pharma companies have seen the success of Novo Nordisk and Eli Lilly.

There is a risk, however, for investing in Viking. The biggest risk is that the drug fails in its testing. Also, there is a risk that it may not become a takeover target since the weight loss industry is becoming a duopoly.

Sana Biotechnology

Sana Biotechnology (NASDAQ: SANA) stock price has jumped by over 85% this year and by 36% in the past 12 months. That jump has pushed its total market cap to over $1.7 billion. 

Sana Biotech is a company that is using cell engineering to create drugs for area like oncology, central nervous system, and diabetes. Its drugs include Ardent, Gleam, and Vivid. 

The company’s science is quite complicated but analysts believe that it can change the treatment process if it works. For example, in Type 1 Diabetes, Sana Biotechnology aims to use cell engineering to give users stealthy new cells that can make insulin without being attacked.

The risk for investing in Sana Biotechnology is that it is burning substantial sums of money. It lost over $283 million in 2023 after losing $269 million in 2023. As such, since it has just $135 million in cash, there is a risk that it will raise additional funds.

The other risk is that most of the products in its pipeline are in the first stage of trial, meaning that things could go wrong.

Recursion Pharmaceuticals 

Recursion Pharmaceuticals (NASDAQ: RXRX) stock price has jumped by over 23% in the past 12 months. It has dropped by over 25% this year but analysts believe that it has room to recover. 

The company is working on products to treat rare conditions and oncology. Most of its products have moved to the second phase of trial, which is a positive thing. It has also used big data and artificial intelligence to accelerate drug discovery.

Recursion Pharmaceutical’s revenue is growing. It made over $44.6 million in 2023, up from $36 million a year earlier. However, the company is still losing substantial sums of money, opening it for potential dilution. It had a net loss of over $328 million in 2023 and has over $391 million in cash and short-term investments, meaning that it could dilute its investors this year.