2 Biotech Stocks That Are Screaming Buys in May

It's very tempting to pile into the stocks with the strongest positive momentum of the moment -- they've proven themselves and could continue along this path. But in many cases, you could set yourself up for a bigger win if you look to quality companies that have seen their stocks stumble in recent times. This is because you'll buy at a reasonable price and potentially win as the stock recovers and goes on to gain.

Two biotech stocks make perfect candidates for this sort of strategy right now. One has declined over the past four years, while the other just slipped in recent weeks. Each represents a bargain buy right now. It's also important to note that these two players share a product, one that should start generating significant revenue in the quarters to come. Let's take a close look at these two biotech stocks that are screaming buys in May.

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1. CRISPR Therapeutics

CRISPR Therapeutics (NASDAQ: CRSP) focuses on the exciting field of gene editing, a technology that "fixes" faulty genes responsible for disease. The CRISPR technique involves cutting DNA at a particular location to launch a natural repair process. Importantly, this biotech has proven that its technology works, scoring the first ever product approval for a CRISPR-based therapy.

This approval was for blood disorders treatment Casgevy, and rollout began last year. The launch and revenue growth processes take longer for such a product than for standard medicines because gene editing involves several steps. All this means that we'll just start seeing revenue pick up momentum later this year.

CRISPR Therapeutics partnered with big biotech Vertex Pharmaceuticals (NASDAQ: VRTX) on Casgevy. Although Vertex takes a larger share of profit at 60%, this is worthwhile because Vertex has the solid commercial experience and infrastructure that could help make the product successful. Vertex also bears the biggest share of the costs.

Meanwhile, CRISPR Therapeutics has other promising candidates involved in clinical trials. It just presented encouraging phase 1 data for CTX310. This candidate could address a huge patient population, as it aims to treat people with high cholesterol. The company said that potentially 40 million people in the U.S. alone could be helped by such a product.

CRISPR Therapeutics also expects trial updates from other candidates in the areas of oncology and autoimmune disease this year. So, this could be a catalyst-rich year for this biotech, making now, after the stock's 80% four-year decline, a great time to buy and hold on as this story moves into its next chapters.

2. Vertex Pharmaceuticals

Vertex, as mentioned, partners with CRISPR Therapeutics on Casgevy, and that product should represent a new stream of revenue growth for the company as of this year. On top of this, it's important to remember that Vertex dominates the global cystic fibrosis (CF) treatment market with blockbuster drug Trikafta -- and Vertex just launched a new CF drug, Alyftrek, that's even better than its predecessor.

Now Vertex is shifting its Trikafta patients to Alyftrek. In its recent earnings call, the company said the launch of this product, as well as the rollout of another new release -- painkiller Journavx -- are going well. These drugs represent billion-dollar opportunities for Vertex, and Journavx is particularly interesting because it opens the door to an entirely new treatment area for the company.

Journavx is a non-opioid pain drug approved for moderate to severe acute pain, and Vertex continues to usher it through clinical trials for other pain indications, including chronic pain. The Journavx approval shows that Vertex not only can be successful in CF, but in other major treatment areas as well.

Vertex shares climbed 83% over three years through the start of May. But since Vertex's earnings report last week, when it spoke of a temporary illegal generic competition problem in Russia, the stock has retreated 15%. This has left Vertex trading for 23x forward earnings estimates, down from more than 28x just a few days ago. Considering Vertex's leadership in CF and its new growth drivers, biotech investors won't want to miss out on this top biotech at this bargain price.

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Adria Cimino has positions in Vertex Pharmaceuticals. The Motley Fool has positions in and recommends CRISPR Therapeutics and Vertex Pharmaceuticals. The Motley Fool has a disclosure policy.