Amp Up Your Portfolio With These Biotech Stocks

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Biotech stocks have been among the market's brightest shining stars, but many of these stocks have already made big moves higher. As a result, investors could be wondering if there are any companies in the group still worth adding to their portfolios. With that in mind, here are two companies that I think can still be stashed away in portfolios for the long haul.

Growth on the cheapFirst up is Gilead Sciences , a biotech powerhouse that's the dominant manufacturer of medicine used to treat HIV and hepatitis C. The company boasts five different billion-dollar blockbuster HIV therapies, including the fast-growing combination drugs Stribild and Complera. As a result, Gilead Sciences notches more than $10 billion in sales annually from its HIV medicines.

Last year, Gilead Sciences expanded its product portfolio beyond HIV with the launch of its next-generation hepatitis C drugs Sovaldi and Harvoni. Those two therapies, which revolutionized HCV treatment by boosting cure rates and cutting treatment duration, became instant blockbusters, generating more than $12 billion in combined sales last year.

Despite Gilead Sciences' gold-standard leadership in HIV and HCV, investors have been concerned that competitors could eat into the company's market share -- particularly in hepatitis C. This has kept a lid on Gilead Sciences' valuation -- and that may mean that its shares still offer plenty of upside.

Currently, investors are paying only 13.4 times trailing 12-month earnings and 10.6 times forward 12-month earnings to buy Gilead Sciences' shares. That could be a bargain because Gilead Sciences is rolling out a new variation of its long-standing HIV drug Viread that extends the life of its HIV patent portfolio, and the company is on tap to report data from trials evaluating a next-generation pan-genotype hepatitis C drug that could solidify its dominance in treating HCV.

Source: GPhrma.

Envy-inspiring future growth forecastsAlthough cancer and autoimmune disease drugmaker Celgene Corp.'s shares aren't trading as cheaply as those of Gilead Sciences, Celgene's long-term sales and profit forecasts suggest that its current share price looks very reasonable.

In January, Celgene announced that its sales and profit could reach $13 billion and $7.50 per share, respectively, in 2017, up significantly from the $9 billion and $4.60 per share that Celgene expects to report in 2015. Celgene also offered up a forecast for 2020 that calls for sales and EPS of at least $20 billion, and $12.50 per share, respectively.

Celgene's January guidance already made its shares intriguing to investors, but Celgene got even more attractive last month when it boosted its January long-term forecast after announcing a $7.2 billion acquisition of the multiple sclerosis drug-developer Receptos. After factoring in potential sales tied to Receptos' oral MS drug, ozanimod, Celgene thinks sales and EPS could eclipse $21 billion and $13 in 2020.

Celgene's rosy outlook could even prove to be too conservative. Celgene thinks that ozanimod's peak annual sales could reach between $4 billion and $6 billion, and additional opportunity for revenue and profit could come from collaborations with promising clinical-stage companies such as Juno Therapeutics, which is working on immuno-oncology drugs targeting blood cancer.

Tying it togetherThere's no guarantee that Gilead Sciences and Celgene won't stumble along the way, but both of these companies are top-notch biotech leaders with needle-moving drugs under development, rock-solid balance sheets, and arguably inexpensive price tags that I think are worthy of including in long-term portfolios.

The article Amp Up Your Portfolio With These Biotech Stocks originally appeared on Fool.com.

Todd Campbell owns shares of Celgene and Gilead Sciences. Todd owns the equity research firm E.B. Capital Markets, LLC. E.B. Capital's clients may have positions in the companies mentioned. The Motley Fool recommends Celgene and Gilead Sciences. The Motley Fool owns shares of Gilead Sciences. Try any of our Foolish newsletter services free for 30 days. We Fools may not 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.