Sightful Invest
  • Business
  • Investing
  • Politics
  • Stock
Top Posts
Flashback: Top five wildest moments from Elon Musk’s...
Less than half of DOGE-terminated contracts can be...
Jill Biden should have to answer for ‘cover...
DOGE staffing shakeup as Elon Musk hangs up...
State Dept says DOGE’s changes will be permanent...
President Trump teases ‘last day, but not really’...
Trump denounces court’s ‘political’ tariff decision, calls on...
I’m a physician and I’m worried that our...
Inside the late-night drama that led to Trump’s...
Alleged attempt to impersonate White House chief of...
  • Business
  • Investing
  • Politics
  • Stock

Sightful Invest

Investing

How to Invest in Biotechnology (Updated 2024)

by admin February 19, 2025
February 19, 2025
How to Invest in Biotechnology (Updated 2024)

Investors interested in the life science sector are well aware of the importance of biotechnology.

From finding cures for diseases to feeding future generations, many areas of day-to-day life are influenced by players in the biotechnology space, and expert projections show the industry’s future looks bright.

But how can investors gain exposure to biotechnology? Here’s a brief overview of how to invest in the expanding biotechnology market, from stocks to watch to exchange-traded funds (ETFs).

How to invest in biotechnology stocks?

The main method of investing in the biotech sector is through stocks. Right off the bat, when investing in the biotech sector it’s important to understand that there is a difference between a biotech company and a pharmaceutical company.

“From a philosophical standpoint, biotechnology is a risk-taking enterprise, while the pharmaceutical industry is about managing and diversifying risk,” Investopedia explains in an article. Notably, the publication points out that biotech stocks tend to have insignificant revenue compared to pharmaceutical stocks.

When investing in biotech, investors should also pay attention to the US Food and Drug Administration (FDA), which requires that all companies in the sector establish sufficient bodies of information to show that their drugs are safe and effective. That is generally accomplished in the clinical trial phase of product testing, which typically consists of a series of three clinical studies.

Additionally, as with most other sectors, when investing in biotechnology stocks investors must decide on the level of risk they are willing to take. For instance, a large, established biotechnology company with a multibillion-dollar market cap is less likely to succumb to bad market conditions than a more speculative, newly listed company in the clinical trial phase.

How to invest in biotechnology ETFs?

While investing in biotech stocks is generally the more popular choice when it comes to getting involved in the sector, ETFs are a way to mitigate some of the risks that are inherent with investing in stocks.

ETFs hold assets like stocks, commodities and bonds, and trade close to their net asset value. Typically, ETFs track an index. For biotechnology, there are several indexes that can be followed, including the S&P Biotech Select Industry Index (INDEXSP:SPSIBI), the NYSE Arca Biotechnology Index (INDEXNYSEGIS:BTK) and the NASDAQ Biotechnology Index (INDEXNASDAQ:NBI).

The largest ETF in the biotech sector is the SPDR S&P Biotech ETF (ARCA:XBI), which launched on February 6, 2006, and tracks 137 holdings in its portfolio. Its top three weighted companies are Crinetics Pharmaceuticals (NASDAQ:CRNX), Exelixis (NASDAQ:EXEL) and Dyne Therapeutics (NASDAQ:DYN).

The second largest biotech ETF is the iShares NASDAQ Biotechnology ETF (NASDAQ:IBB), which launched on February 5, 2001. This ETF tracks 218 holdings, with the top three — Gilead Sciences (NASDAQ:GILD), Amgen (NASDAQ:AMGN) and Regeneron Pharmaceuticals (NASDAQ:REGN)— weighted at close to or over 8 percent each.

Investors may also want to consider small biotech ETFs — click here for an overview.

What’s the outlook for biotechnology?

It’s often a slow wait when it comes to gains in the biotech market as companies rely on FDA approvals and feedback.

In terms of the sector’s future outlook, Grand View Research predicts that the global biotechnology market will have a compound annual growth rate of 13.96 percent between 2024 and 2030 to reach US$3.88 trillion by the end of the forecast period.

It attributes this growth to the increasing need for new drugs to treat chronic diseases, such as strokes, cancer, asthma and hypertension. The focus is on diagnostics and therapeutic solutions for these chronic diseases. There is also increasing demand for biotechnology innovation in the agriculture sector in response to rising demand for organic food products.

For its part, Verified Market Research is forecasting the global biotechnology market will reach a value of more than US$5.25 trillion in 2030. The firm sees significant advancement and investment in research and development, the rising prevalence of infections and chronic diseases, and increasing government and regulatory support as major drivers of revenue growth for this life science sector in the coming years.

The nanotechnology drug market is a subsector of the biotech space that is also expected to see major growth in the coming years. Precendence Research forecasts that this sector will experience a CAGR of 8.13 percent between 2023 and 2032 to reach a total value of US$183.11 billion.

‘Nanotechnology is critical in the development of drug-delivery technologies that have the potential to expand the medical market,’ stated the report. ‘Nanotechnology can enhance the efficacy of medications that have failed clinical trials. It provides drug delivery systems, treatment, and management for chronic diseases like cancer, HIV/AIDS, and diabetes.’

Securities Disclosure: I, Melissa Pistilli, hold no direct investment interest in any of the companies mentioned in this article.

This post appeared first on investingnews.com

previous post
Anteros Announces Application to JEA Program for Havens Steady Critical Mineral VMS Property, Newfoundland
next post
Musk Proposes DOGE Audit of Fort Knox Gold Reserves

You may also like

Coelacanth Energy: Natural Gas Production, Exploration at the...

November 5, 2024

Allup Acquires 100% of McLaren Valuable Heavy Mineral...

August 20, 2024

Coelacanth Energy Inc. Announces Operations Update

December 3, 2024

Crypto Market Recap: Trump’s Crypto Moves Stir ECB...

February 8, 2025

Chris Vermeulen: Next Gold Targets and “Sweet Spot”...

December 17, 2024

$5.6M Contract Awarded for US Department of Defense...

September 11, 2024

Top 9 Manganese-producing Countries

March 19, 2025

Pharma Market Forecast: Top Trends for Pharma in...

January 14, 2025

Top 10 Manganese-producing Countries (Updated 2024)

July 30, 2024

What is the Gold Spot Price? (Updated 2024)

September 11, 2024

Recent Posts

  • Flashback: Top five wildest moments from Elon Musk’s DOGE tenure as it comes to an end
  • Less than half of DOGE-terminated contracts can be publicly tracked, only about a quarter of grants: watchdog
  • Jill Biden should have to answer for ‘cover up’ of former president’s decline, White House says
  • DOGE staffing shakeup as Elon Musk hangs up his hat, White House confirms
  • State Dept says DOGE’s changes will be permanent amid Musk’s departure

    Become a VIP member by signing up for our newsletter. Enjoy exclusive content, early access to sales, and special offers just for you! As a VIP, you'll receive personalized updates, loyalty rewards, and invitations to private events. Elevate your experience and join our exclusive community today!


    By opting in you agree to receive emails from us and our affiliates. Your information is secure and your privacy is protected.

    Categories

    • Business (751)
    • Investing (2,211)
    • Politics (2,729)
    • Stock (4)
    • About us
    • Privacy Policy
    • Terms & Conditions

    Disclaimer: sightfulinvest.com, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

    Copyright © 2024 Sightful Invest. All Rights Reserved.