High-growth MedTech Stocks Offer Big Upside

MedTech Stocks Come With Risk but the Potential Growth is Enormous


In a volatile market, the big question on the minds of investors is whether or not to take advantage of buying opportunities. I won’t try to convince you one way or the other. But if you’re interested in high-growth, small-cap MedTech stocks, here are three examples that offer insight into the sector.

Invitae (NVTA) is a genetic information company that’s working to bring comprehensive genetic information into mainstream medical practice. The company specializes in genetic diagnostics across all stages of life, including perinatal, prenatal, pediatric and adult. Management has been working to pool genetic tests into a single service that could be offered at a lower price than current alternatives, while delivering faster turnaround time.

Invitae’s growth strategy is relatively simple. By making genetic testing more accessible and affordable it expects to supply a large volume of tests. It’s also building a genome network through partnerships with industry peers and working to share genetic information on a global scale through services that inform healthcare throughout life.

ViewRay (VRAY) makes MRI-guided radiation therapy systems that are used for imaging and treating cancer patients. Its MRIdian solution integrates MRI technology, radiation delivery and proprietary software to simultaneously image and treat cancer patients.

The technology is most interesting because, as compared to traditional radiation therapy systems known as linear accelerators (linacs), MRIdian appears better at targeting tumors while avoiding healthy tissue and can personalize treatment depending on a patient’s anatomy and tumor location/size.

Codexis (CDXS) is a protein engineering company that specializes in the discovery, development and commercialization of novel proteins. These engineered proteins, also known as biocatalysts and/or enzymes, are used in a wide range of industries to make manufacturing processes faster, cleaner and more efficient.

Historically, naturally occurring proteins have been used to produce or add desirable characteristics to many of the products we all use on a daily basis. But in their natural form proteins come up against inherent barriers that limit their commercial potential.

Codexis has developed a proprietary protein engineering technology platform, CodeEvolver, to engineer novel proteins that overcome those inherent limitations. This opens the door to a huge range of uses in customer products, manufacturing processes, and other commercial dimensions.

Its proteins catalysts help customers manufacture products at a lower cost and with lower fixed capital investment. They also reduce the cost of development of complex chemical synthesis processes and can even eliminate entire steps from chemical production. And they allow for the manufacture of purer end-products with lower levels of impurities.

Risk is still present with these stocks, though.

For instance, Invitae is working against fluctuating seasonal demand, and many genetic testing stocks have done poorly. ViewRay is competing against established systems with a large foothold in the medical field, and radiation oncology is not an easy business to break into. And Codexis has to contend with the timing of customer manufacturing schedules and clinical trials that can have a big impact on sales trends.

So while there is potential for growth in these examples, MedTech stocks always come with a healthy amount of risk, and you should always practice caution when investing in this sector.


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