3 Biotech Stocks We've Fallen For

By Markets Fool.com

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Source: Flickr userSimon & His Camera.

Love is in the air. At least it is for three of our top Motley Fool healthcare contributors. Each has a crush on a different biotech stock darling, and they all find their pick attractive for different reasons. Read on to learn which biotech companies have caught the fancy of these three contributors, and why.

: OK, I admit it. I have a crush onCelgene Corporation, the de facto biotechnology innovator responsible for one of the best-selling cancer drugs on the planet.

Celgene's Revlimid is the market-leading second-line treatment used to treat multiple myeloma patients. It already generates $5 billion in annual sales,but if the FDA gives the OK for Revlimid's use as a front-line treatment in February, its sales could go even higher in 2015.

Revlimid is reason enough to love Celgene, but the company also has a slate of other attractive drugs. The company's pancreatic cancer drug Abraxane did $212 million in third-quarter sales, and Pomalyst, a third-line treatment for multiple myeloma, saw its sales double in the third quarter to $181 million.

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Celgene's newly launched autoimmune drug, Otezla, could also have billion-dollar blockbuster potential someday. And if those reasons don't have you warming up to Celgene yet, consider that it's also courting some of the most intriguing emerging biotech companies through collaborations and -- in some cases -- equity stakes. That suggests that there could be plenty of reasons in the pipeline to fall in love with Celgene all over again in the years to come.

: I've always had a weakness for starry-eyed dreamers, and no large-cap biotech fits that bill better thanBiogen Idec .The company is known for its powerhouse MS portfolio, but it also has a very deep pipeline of investigational compounds attempting to slay other neurological dragons, such as Alzheimer's, ALS, and Parkinson's. While the research field for neurological diseases is littered with failures, Biogen's experimental medicine for Alzheimer's showed promise in an early trial last month. In terms of other catalysts, it has six drugs in late-stage trials, several of which could produce high-profile data in 2015.

Biogen follows the basic principles of successful investing in its R&D (i.e., diversification and risk mitigation). Around 70% of its roughly $1.5 billion-a-year R&D spending goes to neurology, but it also diversifies into less risky areas, as shown by last year's launch of two new hemophilia drugs, Alprolix and Eloctate. On the M&A front, Biogen recently acquiredConvergence Pharmaceuticalsin a$675 million buyout to accelerate growth of its pain portfolio.

While I personally expect a sweet year for Biogen investors, as we all know, falling in love can blind you to imperfections. So before you risk a nickel, be sure to check out Todd Campbell's view in "Is Biogen Idec Inc. in Trouble?" for the other side.

: Some people -- Todd and Cheryl, for example -- like biotechs with drugs on the market. They like revenues and earnings and everything that comes with that.

Me? I'm a pipeline guy. There's nothing more beautiful than a big, juicy pipeline.

And they don't get much bigger thanIsis Pharmaceticals. If you exclude approved drugs being studied for additional indications, Isis has a larger pipeline than Biogen and Celgene combined, with over 30 molecules being studied.

How does one company develop that many drugs? With help from partners, including Cheryl's crush Biogen, which is a major strategic partner.

All of Isis' drugs use antisense technology, which makes designing the drugs fairly straightforward. The limiting factor is finding the right target and the money -- or partner's money -- to fund the clinical trials.

Antisense drugs bind to messenger RNA, the middle-man molecule in the process of making proteins from the DNA genes they code for. Binding a specific mRNA causes them to be degraded, reducing the amount of the corresponding protein that the cells produce.

For example, Kynamaro, Isis' approved drug to treat patients with extremely high levels of cholesterol, binds to the mRNAs used to produce ApoB-100, a component of LDL cholesterol.

With only one drug on the market, which probably isn't going to be a blockbuster because of competition and a relatively small market, Isis caries all the normal caveats of investing in a development-stage drug company. But after decades of development, it appears Isis has advanced the antisense technology far enough that it could rival large biotechs if even half of its pipeline drugs pan out.

At which time I may need to find a new crush.

The article 3 Biotech Stocks We've Fallen For originally appeared on Fool.com.

Brian Orelli has no position in any stocks mentioned. Cheryl Swanson owns shares of Celgene. Todd Campbell is long Celgene and Isis. The Motley Fool recommends Celgene and Isis Pharmaceuticals. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.