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Forecasters anticipate exponential growth throughout the biotech industry over the coming decade, paving the way for a series of stock market opportunities for investors throughout this period.

The potential of the biotechnology market is vast. According to Market.us analysts, the industry is set to grow from a value of just over $1 trillion to $3.67 trillion by the year 2043, representing a compound annual growth rate (CAGR) of around 14% over this time frame.

Given the rate of growth throughout the biotechnology industry, we can expect innovations to extend beyond the biological systems, organisms and other derivatives that categorize the landscape to provide cutting-edge solutions to various industries like pharmaceuticals, agriculture, healthcare and environmental science.

In addition to this, market analysts expect the biotechnology industry to experience significant growth in 2024, owing to recent industry advances.

“Biotechnology is an industry with the potential for rapid growth in 2024,” highlights Maxim Manturov, head of investment research at Freedom Finance Europe. “Advances in biotechnology lead to the development of new drugs and treatment methods (recent hype around Ely Lilly and Novo Nordisk and their weight loss drugs is evidence of this), creating a growing demand for products and services in the field of biotechnology.”

In highlighting Ely Lilly and Novo Nordisk, two stocks that have posted a strong start to 2024 on the New York Stock Exchange, we can see that the growing biotech sector has an international reach.

While Ely Lilly is a strong reflection of the quality of U.S. biotech, Novo Nordisk is a Danish-based firm that’s posted growth above 345% over the past five years alone.

According to a recent OECD update on key biotechnology indicators, the industry has flourished throughout many global nations. While the United States can count the highest number of biotech companies with 2,840 active domestically alongside an R&D intensity added value of 17%, the United Kingdom recently posted a strong Q3 2023 to solidify its status as a European leader in the field.

However, it’s also worth highlighting Belgium’s 35.7% biotech R&D added value, highlighting plenty of reasons for investors to remain optimistic about Europe’s progress within the industry.

The update also details nations such as France, Canada, Spain and South Korea, all of which possess more than 1,000 active biotech firms.

In terms of research and development, this strong global commitment to the sector will help to secure a steady flow of innovation that will secure more growth throughout the industry.

Discovering Opportunities on Wall Street

The biotech industry’s strong CAGR over the decade and beyond means that investors can discover a host of opportunities on Wall Street that can benefit portfolios on both a short and long-term basis.

With this in mind, let’s examine three key stocks that can offer plenty of immediate value for investors:

1. Amphastar (AMPH)

While Amphastar Pharmaceuticals has seen consistent stock market growth throughout the post-pandemic years, investors in the biotech leader have plenty to be excited about for the future.

The firm saw sales increase by 50% to $180.56 million in Q3 2023, while adjusted earnings rallied some 203% to $1.15 per share.

This ramp-up in sales was due in no small part to Amphastar’s acquisition of Baqsimi in 2023 from Eli Lilly. Boasting $28.7m in Q3 sales, Baqsimi has become a formidable addition to Amphastar’s repertoire, which appears set for continued growth over the year ahead.

2. Catalyst Pharmaceuticals (CPRX)

What makes Catalyst Pharmaceuticals a stand-out stock is the firm’s strategy of buying rights to sell therapies for rare diseases. This comes in the form of either purchasing late-stage programs and finishing development, or by buying commercialization licences outright.

On the stock market, Catalyst’s growth of more than 450% has been supported by the company’s $121 million in fully liquid assets (as of Q3 2023).

Why should investors be excited about Catalyst’s short-term prospects? 2024 is set to be the year that the firm commercializes Agamree, which is a steroid for Duchenne muscular dystrophy (DMD).

In bringing these invaluable treatments to market, we’re set to see Catalyst cement itself as an invaluable player in the treatment of many rare and acute illnesses.

3. Axsome Therapeutics (AXSM)

One of the most impressive performers over the past five years in the biotech industry is Axsome Therapeutics. Posting growth of over 900%, Axsome has consistently proven to be a lucrative stock to hold.

This is due in no small part to the impressive pipeline of late-stage clinical trials that could be soon to hit the market.

Late 2022 saw the launch of Auvelity as a treatment for major depressive disorder, while the drug, AXS-05 is also being evaluated for its effectiveness in treating Alzheimer’s disease agitation and smoking cessation therapy.

The prospective expansion of AXS-05 use cases could be matched by three other drugs that are currently being involved in late-stage testing. AXS-07, AXS-12, and AXS-14 could soon operate as effective treatments for migraines, narcolepsy, and the chronic pain disease fibromyalgia respectively, and may offer a major boost for Axsome’s Wall Street performance.

With peak annual sales estimated at $2.6 billion, Auvelity could go on to become a major player in treating depression, while the peak annual sales forecasts of the likes of AXS-07 and AXS-14 weigh in at a minimum of $500 million respectively. This forms a great foundation for speculative investors to add Axsome Therapeutics to their portfolios today for strong prospective growth.

Research Vital in Competitive Biotech Landscape

At this stage, it’s key to acknowledge that the biotech industry’s sheer level of competition means that market leaders are liable to struggle to maintain their edge over rivals with innovative new technologies and drugs coming to market regularly.

With this in mind, it’s worth investors dedicating sufficient time towards monitoring the fundamentals of their chosen biotech stocks to keep on top of the changing face of the industry.

The biotechnology landscape’s path to a $3.67 trillion industry will bring significant volumes of growth for its leading stocks, but nobody’s position as a market leader is assured.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.