The biotech industry got a huge boost last year as companies scrambled to find treatments and vaccines for COVID-19. After hitting a high in February, the industry fell back as cyclical stocks came into play. But now that an economic recovery is already priced into the market, undervalued biotech stocks such as Amgen (AMGN), Gilead Sciences (NASDAQ:GILD), and Vertex Pharmaceuticals (NASDAQ:VRTX) should share their shares rise in the months ahead.The biotech industry is composed of companies that develop drugs and other treatments for viruses, medical conditions, and diseases. The industry has seen its share of losses over the past couple of months but that provides us the perfect opportunity to pick up shares of stocks that could see substantial gains in the months ahead.
The biotech industry hit a high point in early February after seeing huge gains in 2020. The recent pullback results from a rotation into cyclical stocks, worries over drug-pricing reforms, and delayed drug approvals. I believe that these worries are overblown, and we can use them to our advantage. Any optimism over our economy's gradual opening is already priced into cyclical stocks, and investors will now be looking for shares with lower valuations.
Plus, any worries over potential Congressional legislation on drug pricing are misplaced. The chances of anything getting passed are slim. And the three stocks I will focus on in this article won't be affected by FDA delays on approvals. They are Amgen Inc . (NASDAQ:AMGN), Gilead Sciences, Inc. (GILD), and Vertex Pharmaceuticals Incorporated (VRTX). These three biotech stocks are poised to see their shares rise in the months ahead.