The Century of Biology:

7 Biotech Stocks
to Buy Now
Contents

The Century of Biology: 7 Biotech Stocks to Buy Now 3

You Are Watching the Revolution Live 7

The CRISPR Conundrum 9

Basics of Gene Editing and the Revolutionary CRISPR Cas9 Science 11

A New Science for Treating Disease, Courtesy of Good Ole Bacteria 12

CRISPR: World-Changing and Always Controversial 15

Welcome to Synthetic Biology 16

Biotech: They Called the Bubble “Over & Done” in 2015 17

The Century of Biology Will Continue to Blow Your Mind 19

7 Biotech Stocks to Buy Now 20

Disclaimer 25

The Century of Biology: 7 Biotech Stocks to Buy Now 2

Overview

Ever since the human genome was mapped nearly 20 years ago, an explosion
of scientific discovery has been unleashed with many hundreds of public and
private companies, universities, and research institutes working to better
understand life and cure disease.

According to the National Institute of Health (NIH), the cost to sequence a

genome has fallen from $10 million in 2007 to under $1,000 today. And this
economic access has fueled the rise of more scientists seeking to do more
research that wasn’t even thought of a decade ago.

Now, it’s a global R&D race to treat

and/or cure thousands of genetic
diseases, to say nothing of the wars “...the cost to sequence a
on dozens of cancers which may or
may not have genetic roots. Along genome has fallen from
with universities and other private
and public research institutes, the $10 million in 2007 to
competitors and collaboraters in this
global race comprise over 300 public under $1,000 today.”
Biotech companies that we have the
ability to research and invest in.

Plus, there are hundreds more start-up companies attracting both passionate
scientists and venture capital funding. GV, formerly known as Google Ventures,
has brought a few bio-focused companies into the spotlight: Foundation
Medicine, a platform for large-scale testing of DNA mutations and Flatiron
Healthcare, a software company that organizes the world’s oncology
information and makes it accessible for doctors, patients, and researchers. Both
companies were acquired by Roche in 2018.

The Century of Biology: 7 Biotech Stocks to Buy Now 3

On the first trading day of January of 2019, I published a special report for
Zacks Ultimate members describing several powerful medical trends emerging
from breakthrough biological sciences.

I also recommended 7 companies to buy in order to profit from these explosive

scientific and disease-conquering trends.

Within weeks of the report being published, two of those companies were
involved in big M&A take-over announcements.

1) Celgene (CELG) agreed to be purchased by Bristol-Myers (BMY) for $74 billion,

a 50% premium over its price when I recommended it. This deal just closed in
November.

2) Spark Therapeutics (ONCE) agreed to be purchased by Roche for $114.50 per

share in an all-cash transaction. The total deal value of $4.3 billion amounted
to a 193% premium over where ONCE was trading, $39, when I originally
recommended it. This deal has yet to close as of this writing, but seems very
likely soon.

And two more of the companies have seen explosive gains without any M&A
action.

Both Vertex Pharmaceuticals (VRTX) and Editas Medicine (EDIT) are up over
30% since the start of the year (through December 6, 2019).

So with the 2 big buyout deals closing, and 2 other stock picks up significantly,
I decided it was time to add some fresh picks to The Century of Biology.

First let me share 2 updates on the science and medical trends described in the
original report. Of course, I can’t update all the developments, any more than
I could describe them completely in the original report. But these items really
stand out and have handed members in my Healthcare Innovators portfolio
other substantial gains in different stocks...

Update #1: CRISPR Therapeutics (CRSP) and collaboration

partner Vertex made this announcement on November 19…
“Positive Safety and Efficacy Data From First Two Patients Treated With
Investigational CRISPR/Cas9 Gene-Editing Therapy CTX001® for Severe
Hemoglobinopathies.”

The Century of Biology: 7 Biotech Stocks to Buy Now 4

This is the first human data for any CRISPR clinical trials. The two diseases of the
blood involved were Sickle Cell Disease and beta thalassemia.

SCD and ß-Thalassemia are related diseases caused by beta-globin (HBB) gene
mutations. In SCD a polymerizing mutant form of hemoglobin (Hb) causes
stiff red blood cells and insufficient oxygen supply, while in ß-Thalassemia the
mutation causes insufficient Hb production and anemia.

This ground-breaking CRISPR news handed my Healthcare Innovators portfolio

an 83% gain in CRSP shares -- and this was after two other gains of over 30%
in CRSP in 2019!

This is the type of investing and trading one can do in Biotech when you do your
homework on companies and know where to take advantage of the greed and
fear of other market players at emotional extremes.

Update #2: Global Blood Therapeutics (GBT) Finally Gets the

FDA Nod
Another big winner for us -- rallying over 65% in one month, from earnings on
November 7 to December 6 -- was Global Blood Therapeutics (GBT).

Here’s what I told Healthcare Innovators members in early December...

On November 25, we got confirmation of what we’ve been banking on here for
18 months:

FDA grants accelerated approval to Global Blood Therapeutics’ Oxbryta

“The U.S. Food and Drug Administration announced it has granted

accelerated approval to Oxbryta (voxelotor) for the treatment of Sickle
Cell Disease in adults and pediatric patients 12 years of age and older.
Oxbryta was granted Accelerated Approval, which enables the FDA
to approve drugs for serious conditions to fill an unmet medical need
based on a result that is reasonably likely to predict a clinical benefit
to patients. Further clinical trials are required to verify and describe
Oxbryta’s clinical benefit.”

“Oxbryta, an oral therapy taken once daily, is the first approved

treatment that directly inhibits sickle hemoglobin polymerization,
the root cause of SCD. The accelerated approval of Oxbryta is based

The Century of Biology: 7 Biotech Stocks to Buy Now 5

 on clinically meaningful and statistically significant improvements
in hemoglobin levels, accompanied by reductions in red blood cell
destruction. The medicine is expected to be available through GBT’s
specialty pharmacy partner network within two weeks.”

Upon this news, several Wall Street biopharma analysts raised their price targets
for GBT shares to between $95 and $110, sending the stock to new all-time
highs above $70.

And overall, I think that institutional biopharma investors will be net buyers of
the first SCD winner while the market cap is still near $4 billion.

Biotech Investing Lessons from 2019 that Will Guide Us in 2020

The company breakthroughs and stock stories I just described tell part of the
tale of what happened to Biotech in late 2019.

Another bright spot was in the race to treat Alzheimer’s, where we banked a
164% gain in Axsome Therapeutics (AXSM), even before Biogen (BIIB) released
their somewhat promising data.

Still, Biotech investing wasn’t always so uplifting this year. The summer of 2019
saw a big decline in the industry, with the Nasdaq Biotech Index (IBB) down
over 10% and many constituents down over 30%.

But we hung on to our favorite investments because I always try to maintain

a long-term outlook when I’ve done my homework and calculated the risk/
reward to remain in our favor.

And the IBB has stormed back over 20% to within 1% of new 52-week highs
above $122.

Our vision and endurance have paid off handsomely. And now I welcome you
to make use of the following information to expand your knowledge of these
exciting sciences.

Just remember, if you decide to join us in my 7 latest Top Biotech Picks please
be prepared to accept the volatility that goes along with the outsized rewards
of the most exciting investment industry.

The Century of Biology: 7 Biotech Stocks to Buy Now 6

You Are Watching the Revolution Live
There is, in fact, so much happening in Biotechnology industries and research
labs that is impossible to keep up with it all. But I still try because the new fields
of discovery that are being created are so fascinating and potentially world-
changing.

Look at the new terminologies that are becoming common-place now any time
you see a medical news report:

• Cell therapy
• Gene therapy
• Immuno-oncology
• Gene editing with CRISPR and other modalities

On October 1, 2018 we learned that the Nobel prize for medicine was awarded
to two scientists who helped create the field of “immuno-oncology,” a cancer
therapy that teaches the body’s immune system to fight its own cancer.

Research by Professor James P. Allison of the University of Texas and Professor

Tasuku Honjo from Japan’s Kyoto University led to treatments for melanoma, a
deadly skin cancer.

The Century of Biology: 7 Biotech Stocks to Buy Now 7

The nefarious thing about cancer is that it normally can hide from your body’s
immune system. Immune “checkpoint” therapy has the ability to switch on or
off proteins involved in recognizing cancer and then allowing white blood
T-cells to do their job. It “has revolutionised cancer treatment,” said the Nobel
Academy.

A BBC News article by Michelle Roberts had these quotes from the dynamic
duo...

Accepting the prize, Tasuku Honjo told reporters: “I want to continue

my research ... so that this immune therapy will save more cancer
patients than ever.”

Prof Allison said: “It’s a great, emotional privilege to meet cancer

patients who’ve been successfully treated with immune checkpoint
blockade. They are living proof of the power of basic science, of
following our urge to learn and to understand how things work.”

The Century of Biology: 7 Biotech Stocks to Buy Now 8

The CRISPR Conundrum
By far the most exciting real-time revolution unfolding in Biotechnology --
maybe in all of medicine -- is CRISPR gene editing. In fact, many experts call
CRISPR the most important discovery (so far) in this, The Century of Biology.
Not only do we have two women scientists from different continents who
co-discovered the essential nature of this genetic breakthrough only as recently
as 2012, we have three public companies racing for robust R&D validation and
battling over patent rights.

As if that weren’t enough going on in this new science, there have been
frequent reports about the dangers of CRISPR where unintended “edits” can
be caused, disrupting the genome of an organism. Then in 2018, a completely
new derivation of CRISPR was unveiled that could prove less error-prone, and
thus less risky for eventual human use.

This discovery further upset the CRISPR apple cart and all 3 pure-play stocks --
CRISPR Therapeutics, Editas Medicine, and Intellia Therapeutics -- have fallen
hard from their all-time highs. Adding to the uncertainty is the fact that the
first human clinical research trial are just being designed, enrolled, and begun
in 2019.

Source: CRISPR Therapeutics (CRSP)

The Century of Biology: 7 Biotech Stocks to Buy Now 9

In short, we are years away from CRISPR coming out of the lab and into the FDA
gauntlet for eventual approval as a treatment modality.

But at least one CRISPR company is virtually certain to come out ahead in this
tumult. I will share that name coming up.

But first, let me describe in more detail exactly what CRISPR is, whether you
are an investor who wants to begin investigating this “breakthrough of the
century,” or one who just wants to know what the bleeding-edge competitive
threat is to the other 300 Biotech companies in existence.

The following sections on CRISPR are excerpts from my special report for Zacks
Ultimate members, that I update quarterly...

The Century of Biology: 7 Biotech Stocks to Buy Now 10

Basics of Gene Editing and the
Revolutionary CRISPR Cas9 Science
Gene editing has been used to modify human blood cells that are then put back
into the body to treat conditions including leukemia and AIDS. It could also
potentially be used to treat other infections and simple genetic conditions such
as muscular dystrophy and hemophilia. This quick definition from Wikipedia
will get us started with the terminology...

Genome editing, or genome editing with engineered nucleases (GEEN), is a

type of genetic engineering in which DNA is inserted, deleted or replaced in
the genome of a living organism
using engineered nucleases,
or “molecular scissors.” These
nucleases create site-specific
double-strand breaks (DSBs) at
desired locations in the genome.
The induced double-strand
breaks are repaired through
nonhomologous end-joining
(NHEJ) or homologous
recombination (HR), resulting in
targeted mutations (‘edits’).

A nuclease is an enzyme that

Source: Editas Medicine (EDIT) cleaves or cuts the chains of DNA
nucleotides into smaller units.

As of 2015 there were four families of engineered nucleases being used:

meganucleases, zinc finger nucleases (ZFNs), transcription activator-like
effector-based nucleases (TALEN), and the clustered regularly interspaced short
palindromic repeats (CRISPR)-Cas system. Zinc finger transcription is the oldest
form of gene editing and still holds promise, while the CRISPR-Cas system was
selected by the journal Science as the 2015 Breakthrough of the Year.

ZFN was the science that handed my Zacks Healthcare Innovators members
155% gains in Sangamo Therapeutics (SGMO) in 2018. Now we are on to
the potentially more-promising field of CRISPR. This all sounds like pretty
complicated science, and it is. But it has its roots in a very simple, primordial
defense mechanism that could be over a billion years old.

The Century of Biology: 7 Biotech Stocks to Buy Now 11

A New Science for Treating Disease,
Courtesy of Good Ole Bacteria

CRISPR could be summed up as simply as this: a protein named Cas9 found in

a bacteria (like streptococcus) attacks the DNA of an invading virus by slicing it
up. In essence, the prey becomes the predator. Mother nature worked on this
for billions of years. She must know something. CRISPR stands for Clustered
Regularly Interspaced Short Palindromic Repeats which describes part of the
pattern of DNA’s double-helix and the attachment of the four nitrogen bases
in pairs—the rungs of the
ladder, if you will—where
adenine (A) pairs with
thymine (T) and guanine
(G) pairs with cytosine (C).

While you have tens of

Source: Editas Medicine (EDIT)
thousands of genes made
by various combinations,
sequences and sizes of
these pairings -- giving
you your own unique 3
billion character genetic
code -- your genome is
not a perfect digital code.
There is unused space,
obsolete pairs, repeats,
and errors or mutations.

For now, this is the crux of what you want to remember about CRISPR-Cas:
scientists have learned from bacteria -- nature’s warriors of survival and her
ninjas of adaptation -- how they utilize proteins to alter the genetic structure of
invading viruses, and thereby how we can use Cas9 to “edit” genetic material.

When DNA pairs are cut with “molecular scissors,” the genes quickly try to
repair themselves using whatever component material is available. Using an
RNA guide material to both find the desired gene to edit and provide the
designated replacement material, scientists are on the verge of extremely

The Century of Biology: 7 Biotech Stocks to Buy Now 12

precise gene editing.

Because of its ability to modify a cell’s DNA with amazing precision, CRISPR and
its evolving variations -- a new enzyme called Cas13 was recently discovered
that could be less error-prone -- will be a hot arena for science and medical
innovation for decades to come.

Mother nature indeed knows things. In fact, most scientists believe we are
just scratching the surface of what will be discovered this century. So it may be
premature to call CRISPR “the discovery of the century” when we’ve got over
80 years left.

From a USA Today story published by Mike Feibus in July 2017...

“Humans had better be ready to play God. Because we’ve now got the
tools to do just that.”

Credit the recent discovery of CRISPR-Cas9, a powerful

gene-editing tool that gives scientists the ability to make
precise edits of single strands of DNA. Other so-called
“molecular scissors” had already been developed, but
they were very costly and time-consuming to implement.
The emergence of CRISPR has put genomics exploration
into overdrive with quick, precise and cheap tools,
sending science on a fast track to new discoveries.

To help us learn more about this technology, let’s hear

from a company who chose it as their namesake, CRISPR
Therapeutics...

“CRISPR/Cas9 is a rapid and easy to use gene editing technology that can
selectively delete, modify or correct a disease causing abnormality in a
specific DNA segment. CRISPR refers to Clustered Regularly Interspaced
Short Palindromic Repeats occurring in the genome of certain bacteria,
from which the system was discovered; Cas9 is a CRISPR-associated
endonuclease (an enzyme), the “molecular scissors” that are easily
programmed to cut and edit, or correct, disease-associated DNA in a
patient’s cell.

The Century of Biology: 7 Biotech Stocks to Buy Now 13

 “The clustered repeats of CRISPR were discovered by accident in 1987
by researchers studying bacterial defense mechanisms, specifically
how bacteria deal with foreign plasmids and phages. Bacteria have
the ability to open and alter the genomes of invading viruses with a
nuclease called Cas9, inactivating them in the process. The clustered
repeats were given the name CRISPR in 2002 and multiple CRISPR-
associated (Cas) genes were discovered adjacent to the repeat elements
in that same year.”

Again, scientists have simply learned from bacteria how they utilize protein
enzymes to alter the genetic structure of invading viruses, and thereby how we
can copy the mechanism of CRISPR-Cas to “edit” the genetic material of more
complex life like mammals. This opens up a whole new realm of possibilities for
curing genetic diseases.

The Century of Biology: 7 Biotech Stocks to Buy Now 14

CRISPR: World-Changing and Always
Controversial

There are more than 10,000 known single-gene (or monogenic) diseases,
occurring in about 1 out of every 100 births. Scientists and clinicians are now
conducting pioneering research using CRISPR/ Cas9 to address both recessive
and dominant genetic defects, opening up the potential of gene editing to
provide novel transformative gene-based medicines for patients with a large
number of both rare and common diseases.

According to Allele Biotechnology, a private biomedical research company,

“Genome editing has been a heavily studied field for a number of years
with an ultimate goal of specificity to limit off target effects. Zinc Finger
Nuclease (ZFN) was the predominant genome targeting technology
for over ten years, but over time drawbacks to the system emerged.
Certain nucleotide triplets could not be targeted, and interactions
within a zinc finger array could reduce specificity.

“CRISPR formulates a complex containing the Cas9 nuclease and small

guide RNAs (sgRNA) and can be redirected by using different sgRNAs.
This property eliminates the need to construct a completely customized
endonuclease for each target, something that is still required by TALEN
and Zinc Finger. As a result of this the entry barrier to genome editing
has been lowered significantly, allowing for more users and more
innovation.”

The key theme here is “off-target” effects or edits. This is the big risk with all this
gene editing technology. Even if you have a degree in molecular biology, it’s
not going to be easy to predict the path of success and the winners as CRISPR
becomes a treatment modality. But there are some ways we can navigate the
science with relatively low risk and still have significant “skin in the game.”

Besides, it’s always fascinating learning about these companies, their science,
and the long-term wealth-building opportunities. We are almost to my top
picks for this journey of discovery. Just two more elements to address where
science fiction meets the reality of financial market booms and busts.

The Century of Biology: 7 Biotech Stocks to Buy Now 15

Welcome to Synthetic Biology
As beautiful coincidence would have it,
October 1 also marked the first day of
SynBioBeta 2018, the Global Synthetic
Biology Summit in San Francisco, October
1–3.

SynBioBeta is the premier network for

innovators, investors, and thinkers who
share a passion for using synthetic biology
to build a better, more sustainable universe.
The conference showcases the cutting-edge
developments in synthetic biology that are
transforming how we fuel, heal and feed the
world.

The emerging field of synthetic biology is a broad collection disciplines focused

on engineering new biological systems that do not already exist in nature, or
redesigning existing systems from scratch. Scientists are working to build new
life forms, assembling them from their fundamental chemical components,
and using biotechnology to produce substances that are difficult to obtain by
other means -— medicines and fuels being two big areas.

The potential for improved outcomes in agriculture, infectious disease, and

reproductive health in poorer countries is exciting for many researchers.

The Century of Biology: 7 Biotech Stocks to Buy Now 16

Biotech: They Called the Bubble
“Over & Done” in 2015

Biotechnology stocks as a group, represented by the Nasdaq Biotech Index

(IBB), surged from early 2013 into 2015. Exuberance was abundant, driving
many stocks to valuation heights that couldn’t be supported by even the rosiest
projections.

Source: Zacks Investment Research

The IBB reached about $400 (pre-split), before heading into a nasty 40% bear
market correction. Then, the resurgent bull market of 2016-18 brought the
money flow back as smart investors realized my “4 Megatrends of Healthcare”
are still unstoppable:

1. Aging population living longer and needed more care

2. Science revolutions for treating and curing disease

The Century of Biology: 7 Biotech Stocks to Buy Now 17

 3. Earnings power where insurers will pay for treatments before
more expensive surgery, progression

4. M&A power as large pharma companies need to buy new R&D

The IBB did a 3-for-1 split in 2017 and was working on multi-year highs above
$122 in September, with the old record high about $133 (split-adjusted). So you
can see the Biotech Bull roared back, just as I predicted it would back in 2016.

So where does that leave us now after a Q4 meltdown in the stock market that
saw the IBB crash 25% to $90?

It leaves us with some great bargains in Q1 of 2019! The Biotech Bull is still alive
and well. He was just taking a rest.

The Century of Biology: 7 Biotech Stocks to Buy Now 18

The Century of Biology Will Continue to
Blow Your Mind

If I asked you to think of a world-changing technology outside of medicine,

what comes to mind first? I hope it’s Artificial Intelligence as it’s my second-
favorite topic after Biotech. Now imagine how much more and deeper research
can be done in the lifesciences with the powertools of AI.

Plus, AI will make “personalized medicine” a reality for potentially hundreds

of millions. One example I like is Viome, a start-up founded by Silicon Valley’s
Naveen Jain to test your gut’s microbiome and not only prevent disease but to
prescribe the best diet for you.

Bigger picture, when you combine all these technologies, the possibilities for
transforming life and society are mind-boggling, from “designer babies” to
designer brains and bodies as medicine and “self-improvement” take on new
realms. They are also scary.

But as I’ve learned from reading some of the best minds involved in gene
editing and AI -- creator Dr. Jennifer Doudna and MIT physicist Max Tegmark,
respectively -- we have to be as engaged and as knowledgeable as possible to
help steer the trajectory of these “genies” we can no longer put back in their
bottles.

My effort is to learn all I can about Biotechnology to achieve two goals (1)
grow my wealth faster than just about any other sector and (2) be an informed
voice when ethical crossroads are reached and legislators need more support,
restraint, or education. I also happen to love the journey of discovery that is
constantly available when learning about all these companies and their science.

The Century of Biology: 7 Biotech Stocks to Buy Now 19

7 Biotech Stocks to Buy Now
I can’t know for sure who survives the global Biotech arms race. Potentially
hundreds of companies face the threat of extinction.

So I am being very selective when I build my Healthcare Innovators portfolio.

But because I am so optimistic about so many industries and companies, I would
confidently buy 50 to 60 right now for a healthcare-focused fund.

Unfortunately, the portfolio is designed to hold a maximum of only 30 stocks.

So that means I have to be super selective and strive for diversification among
dozens of different sub-industries.

It is with this razor that I bring you my top ideas right now for investors looking
for more diverse exposure to Biotech.

1. Editas Medicine (EDIT) - This is the CRISPR company who just came
out on top of the big patent battles in this space. That’s because they
already licensed a big chunk of the winning technology from the Broad
Institute, affiliated with MIT and Harvard. While these companies are
years away from conclusive efficacy and safety in human trials, at a
sub-$1 billion market cap, I want to own the biggest patent beneficiary,
who also has IP connections to the newest derivations of CRISPR like
Cas-13. Buy under $30.

2. bluebird bio (BLUE) - This is the last pure-play CAR-T immuno-

oncology company, after GILD bought KITE and CELG bought JUNO.
And their pipeline is bubbling with great possibilities, including
a Sickle Cell Disease (SCD) candidate called LentiGlobin, a cancer
program with partner Celgene (now owned by Bristol-Myers) in
multiple myeloma, and an early investigational partnership to explore
the potential synergies with gene editing. At the ASH (American
Society of Hematology) conference in early December, BLUE and BMY
released positive data from their KarMMa study of the original CELG-
BLUE drug bb2121. The results could lead to the first approval of the
approach called CAR-T for patients with multiple myeloma, a deadly
form of cancer found in white blood cells. Buy under $90.

The Century of Biology: 7 Biotech Stocks to Buy Now 20

3. Illumina (ILMN) - Want to play Biotech without the risk of clinical
drug trials and FDA approvals? Then here is your “picks and shovels”
play that I call the NASA of Biotech because they make exploring
the genome faster, cheaper, and more powerful every year. Illumina
makes the premier gene sequencing technology used in research labs
at Biotech companies and universities around the world. Since I last
recommended buying ILMN under $310, it launched up to $380. But
an earnings miss and the Biotech correction gave us another chance
to buy near $300. Buy under $325.

4. Sangamo Therapeutics (SGMO) - Zinc-finger nulcease (ZFN) is

one of the oldest gene editing platforms and while CRISPR is under
the “microscopes of doubt” for safety reasons, Sangamo’s good ole
ZFN gene editing is getting more deserved attention again despite
being considered more labor intensive and costly than the newer
forms of gene editing. In addition to their partnership with Gilead
worth potentially $3 billion, Sangamo and Pfizer just announced
positive follow-up results from the Phase 1/2 Alta study evaluating
investigational SB-525 gene therapy in patients with severe hemophilia
A. The companies are planning to enter Phase 3 trials next year. But
shares got knocked down in December after Sangamo announced
disappointing preliminary data at ASH from a phase 1/2 clinical study
evaluating experimental gene-editing therapy ST-400 in treating rare
blood disease transfusion-dependent beta thalassemia (TDT). I think
this has created a good buying opportunity between $8 and $10.

The Century of Biology: 7 Biotech Stocks to Buy Now 21

5. Invitae (NVTA) - This is the small-cap version of ILMN with its
own strategy to capitalize on the genomic data revolution. Invitae
was selected by UnitedHealthcare as one of only seven diagnostics
companies to be part its Preferred Lab Network, along with highly-
respected institutions like Mayo Clinic. In their Q3 report in November,
the company announced a record $56.5 million in revenue driven by
129,000 genetic tests. Those numbers represent increases of revenue by
51% and volume by 65% year-over-year. Invitae is also now in-network
with Cigna, achieving all major payers with approximately 295 million
covered lives. The big test for management is coming up in their Q4
when they have targeted 500,000 tests and $220 million in revenues
for FY2019. If they miss that mark, shares could get pushed down to
test $14 or lower. Since I think Invitae is on a growth trajectory to
becoming a $3 billion company, I am recommending that investors
start positions between $16 and $18 and be ready to add near $14 if
we are so fortunate.

6. Intellia Therapeutics (NTLA) - This $800 million emerging

Biotech is the third, pure-play CRISPR stock behind CRSP and EDIT.
While CRSP shares are a buy near a $3 billion market cap, I want to
make sure this sub-$1 billion player is on your radar. Intellia is using
CRISPR/Cas-9 and its proprietary Lipid Nanoparticle (LNP) delivery
technology to research treatments for diseases of the liver. Their in
vivo pipeline includes proprietary programs targeting transthyretin
amyloidosis (ATTR), which they are co-developing with Regeneron
Pharmaceuticals (REGN). Their ex vivo programs are focused on
chimeric antigen receptor T cells (CAR-T cells) and hematopoietic
stem cells (HSCs) -- the stem cells from which all of the various types of
blood cells originate -- that they are researching in collaboration with
Novartis (NVS) Institutes for Biomedical Research. With “big brothers”
like these, Intellia is in a good place to develop their science. Buy NTLA
between $14 and $16.

The Century of Biology: 7 Biotech Stocks to Buy Now 22

 7. GW Pharmaceuticals (GWPH) developed the first-and-only
FDA-approved cannabis-derived drug, Epidiolex, for the treatment
of two severe forms of childhood epilepsy. But this is no fly-by-
night “pot” stock. The founders of GW started their medical R&D in
the UK in 1998 with a singular focus on cannabis. In 2010, they had
their first approved drug in the UK for multiple sclerosis, Sativex.
Since the launch of Epidiolex, GW is on their way to eclipsing $300
million in sales this year and should nearly double that next year.
They also have a rich pipeline of R&D working on neurological and
central nervous system treatments for various conditions including
autism and schizophrenia. With a broad foothold in Europe, the
global growth of GW will see the company quickly hit $1 billion
in sales in 2021 and thus I think it’s a strong buy now with only a
$3 billion market cap. Buy between $90 and $110.As you can see, I
picked 3 promising companies with market caps near only $1 billion:
EDIT, SGMO, and ONCE. That’s because I’m often cautious about
valuations and like to see a company have a shot at growing into a
reasonable price-to-sales ratio of 10-20X (reasonable for emerging
Biotech, that is).

Note: My suggested buy ranges for these stocks are only instructive guides
through March 2020. Fundamental and market conditions for companies and
stocks will obviously change over time -- for better and worse -- and price
targets and buy ranges could definitely move higher, or lower. Be sure to
follow me in Healthcare Innovators for weekly updates.

Disclosure: I own and/or trade all 7 of these stocks for my Healthcare

Innovators service.

As you can see, I picked 4 promising small-cap companies with market caps
near only $1 billion: EDIT, SGMO, NVTA and NTLA. That’s because I’m often
cautious about valuations and like to see a company have a shot at growing
into a reasonable price-to-sales ratio of 10-20X (reasonable for emerging
Biotech, that is). That would be the case for BLUE given their partnership with
CELG. And SGMO could be precluded from M&A given their partnership with
Gilead (GILD).

The Century of Biology: 7 Biotech Stocks to Buy Now 23

And, I’m ALWAYS on the look-out in Biotech for who I think might get bought
by, or offered a partnership with, a Big Pharma player who sees the potential.
That worked with Spark (ONCE) getting scooped up by Roche in early 2019.

The big caveat here is that many times existing partnerships preclude a
buy-out because, as I like to say, “why buy the cow when you’re getting the
milk for (nearly) free?”

That would be the case for BLUE given their partnership with Celgene, which
is now part of Bristol-Myers. And SGMO could be precluded from M&A given
their partnerships with both Gilead and Pfizer. But EDIT, NVTA, and NTLA
could be on some M&A radars.

But in Healthcare
Innovators we nailed two “...we nailed ‘two takeovers’...
“take-overs” in 2018 with
JUNO and BIVV -- for 98% in 2018 with JUNO and BIVV
and 75% gains -- and I’d like
to believe it was slightly —for 98% and 75% gains—”
more than luck involved in
such a small portfolio.

Be sure to swing by Healthcare Innovators to see the rest of the portfolio

and where I’m buying and selling these 7 top picks. You can also count on
the latest updates occurring in these fast-moving science and medical fields.
From I/O (immuno-oncology) to CRISPR, I’ve got Zacks Ultimate members
covered!

Kevin Cook is a Senior Stock Strategist for Zacks Investment Research where he
runs the Healthcare Innovators service.

The Century of Biology: 7 Biotech Stocks to Buy Now 24

Disclaimer

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Celgene Corporation; Bristol-Myers Squibb Company; Spark Therapeutics; Roche Holding AG; Vertex
Pharmaceuticals, Inc.; Global Blood Therapeutics Inc.; Axsome Therapeutics Inc.; Biogen Inc.; Editas
Medicine Inc.; bluebird bio; Illumina, Inc.; Sangamo Therapeutics Inc.; Locus Development Inc.; Intellia
Therapeutics Inc.; GW Pharmaceuticals.

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The Century of Biology: 7 Biotech Stocks to Buy Now 25

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The Century of Biology: 7 Biotech Stocks to Buy Now 26