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Biotech Stocks in Canada: Top Picks for 2024

Written by Tim-bot
Reviewed by Friedrich Odermann Fact-checked by Ed Weinberg
Updated 11/17/2023 12 min read

Biotech stocks in Canada offer a unique opportunity for investors willing to navigate the complex intersections of healthcare, technology, and market potential. These companies primarily focus on developing treatments, drugs, and technologies that aim to revolutionize healthcare. They’re volatile, but they hold incredible growth potential, especially if you know what to look for.

You should read this article because it provides a comprehensive guide to investing in Canadian biotech stocks, covering everything from top picks to regulatory considerations.

I’ll answer the following questions:

  • What are biotech stocks and why are they important in Canada?
  • How does the Canadian government regulate biotech companies?
  • What are the top Canadian biotech stocks to watch in 2024?
  • How should one approach investing in biotech stocks?
  • What are the pros and cons of investing in Canadian biotech companies?
  • What should you look for when buying Canadian biotech stocks?
  • Do biotech companies in Canada pay dividends?
  • How can investing in Canadian biotech diversify your portfolio?

Still with me? Good. Now let’s dig into the details.

What Are Biotech Stocks?

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Biotech stocks represent companies involved in biotechnology, essentially a fusion of biology and technology. These companies conduct research and develop products that solve medical issues, from oncology to vaccines. The Canadian biotech industry is still burgeoning but it’s showing promise. Take a page from my trading book: Always scrutinize performance and potential. Stocks in this sector often hinge on trial results and FDA approvals, affecting their prices considerably.

Regulation of Biotech Companies in Canada

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The government plays a pivotal role in biotechnology, as they regulate drug trials, earnings reports, and even stock listings on markets like the TSX or TSXV. So, whether you’re into penny stocks or larger securities, staying updated on regulatory changes is a must. Learning the ins and outs of regulation can help you minimize risk, and trust me, I’ve navigated enough market ups and downs to know that being aware of the rules isn’t just a suggestion—it’s a necessity.

Top Canadian Biotech Stocks to Watch in 2024

My top Canadian biotech picks are:

Before you send in your orders, take note: I have NO plans to trade these stocks unless they fit my preferred setups. This is only a watchlist.

The best traders watch more than they trade. That’s what I’m trying to model here. Pay attention to the work that goes in, not the picks that come out.

Sign up for my NO-COST weekly watchlist to get my latest picks!

From the companies shortlisted through my trusted stock screener, here are some top Canadian biotech stocks that should be on every savvy investor’s radar:

InMed Pharmaceuticals Inc (NASDAQ: INM)

My first Canadian biotech stock pick is InMed Pharmaceuticals Inc (NASDAQ: INM).

They are a promising biotech company specializing in cannabinoid therapies. INM has shown consistent growth in revenue and products. Just as I always look for patterns in stocks, it’s important to track consistent earnings highs and lows in biotech.

Bright Minds Biosciences Inc (NASDAQ: DRUG)

My second Canadian biotech stock pick is Bright Minds Biosciences Inc (NASDAQ: DRUG).

Focusing on neurology and mental health, DRUG has cutting-edge research and development. I’ve learned that reading between the lines in a quarterly report can tell you a lot about a company’s trajectory. The same goes for Bright Minds, so pay attention to their R&D outlay.

Cybin Inc. (AMEX: CYBN)

My third Canadian biotech stock pick is Cybin Inc. (AMEX: CYBN).

Cybin deals with psychedelic medicines and has a market cap that many analysts consider undervalued. It’s like trading penny stocks with a potential for massive returns. Keeping your finger on the pulse of news articles can offer real-time insights into this evolving market.

Mind Medicine (NASDAQ: MNMD)

My fourth Canadian biotech stock pick is Mind Medicine (NASDAQ: MNMD).

Mind Medicine works on psychedelic-inspired medicines. They’ve been hitting the news for their aggressive research into mental health treatments. Track their clinical studies the same way you would a stock: with a discerning eye and readiness to act.

Fusion Pharmaceuticals Inc. (NASDAQ: FUSN)

My fifth Canadian biotech stock pick is Fusion Pharmaceuticals Inc. (NASDAQ: FUSN).

Fusion focuses on radiopharmaceuticals and oncology. The company offers some groundbreaking treatments and has shown consistent growth in trials and studies. Let’s not kid ourselves; it’s not all roses. But I’ve taught many that spotting growth early is crucial, so keep an eye on their research data.

Investing in Biotech: Considerations and Strategies

trade like a coward - sykes
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Investing in biotech is not for the faint-hearted. The sector’s volatile, full of regulatory hurdles, and teeming with competitors. But the rewards can be astronomical. You don’t have to mirror my techniques, but remember that due diligence and a robust risk management strategy are non-negotiable. Look into all available tools, from AI algorithms to stock screener services, to make your investment choices.

Investing in biotech stocks can sometimes feel like a rollercoaster, especially when you’re dealing with growth stocks that don’t meet expectations. It’s crucial to have a strategy for such scenarios. Don’t let the growth stock blues get you down; instead, learn how to navigate them. For actionable insights, check out this article on how to handle the growth stock blues.

Pros and Cons of Investing in Canadian Biotech Companies

The upside is the high growth potential and the chance to invest in life-changing technologies. On the downside, you deal with extreme volatility, frequent capital raises, and substantial risk. You’ve got to have a stomach for this, similar to navigating the challenging world of penny stocks as I do. Your risk tolerance needs to be defined clearly.

While Canadian biotech stocks offer high growth potential, they come with their own set of risks. If you’re looking to diversify within the healthcare sector, consider exploring mushroom stocks. These stocks are gaining traction in Canada and could offer a less volatile alternative to biotech. Interested? Dive into the details with this guide on mushroom stocks in Canada: top picks, pros, and cons.

How To Buy the Best Canadian Biotech Stocks

The journey starts with robust research. Keep an eye on quarterly reports, market cap, and use tools like a stock screener to filter out noise. Once you’ve shortlisted companies, check for any news, financials, and analyst opinions. Like I always say, be transparent and cut your losses quickly if things aren’t panning out.

Do Biotechnology Stocks Pay Dividends?

Some do, but it’s rare. Most biotech companies prefer to reinvest any earnings back into research and development. If you’re someone who needs regular returns, this sector may not be for you.

It’s true that most biotech companies reinvest their earnings into R&D, but there are exceptions. If you’re someone who prefers the stability of dividends, you can still find some biotech companies that offer them. It’s like finding a needle in a haystack, but they do exist. For more on this, read my guide on penny stocks that pay dividends.

Why You Should Invest in Canadian Biotech Stocks

Apart from growth potential, investing in Canadian biotech gives you a chance to diversify your portfolio geographically. The healthcare sector in Canada is robust and often offers less regulatory red tape compared to the US, providing a more conducive environment for growth and research.

The Impact of Biotech on Healthcare

Biotech companies have the potential to revolutionize healthcare, from targeted cancer therapies to personalized medicine. The scope here is massive. I always urge traders to focus on the long game, and in biotech, the long game can mean contributing to life-altering medical breakthroughs.

Key Takeaways

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Biotech stocks in Canada are volatile but offer enormous growth potential. Investing in this sector requires an appetite for risk but also offers a chance to be part of revolutionary healthcare solutions. Just like in trading, you’ll need to do your homework, and you’ll need to do it well.

Trading isn’t rocket science. It’s a skill you build and work on like any other. Trading has changed my life, and I think this way of life should be open to more people…

I’ve built my Trading Challenge to pass on the things I had to learn for myself. It’s the kind of community that I wish I had when I was starting out.

We don’t accept everyone. If you’re up for the challenge — I want to hear from you.

Apply to the Trading Challenge here.

Trading is a battlefield. The more knowledge you have, the better prepared you’ll be.

What Canadian biotech stocks are on your watchlist? Let me know in the comments — I love hearing from my readers!

Frequently Asked Questions

How Do Biotech Companies Differ from Traditional Pharmaceutical Companies?

While both focus on healthcare solutions, biotech companies often use cutting-edge technologies like CRISPR and gene editing, which can be riskier but also more rewarding. Pharmaceutical companies usually have a broader product base and may be less volatile.

What Are the Main Challenges Faced by Biotech Companies in Canada?

Regulatory hurdles, high costs of research, and competition are some challenges. In trading, you’re only as good as your last trade. In biotech, you’re only as good as your last breakthrough.

How Can Investors Stay Updated on the Latest Developments in Biotech?

The best way to stay updated is by regularly checking reliable news sources, financial reports, and by using tools and services that offer real-time data. If you’re serious about biotech investment, staying updated isn’t an option; it’s a requirement.

What Types of Shares Are Available in Biotech Stocks?

When looking at biotech stocks in Canada, you can invest in both individual shares and ETFs. Using money wisely in addition to your existing portfolio can help in diversification.

Is Bellus Health a Good Investment?

Bellus Health is a prominent business in the Canadian biotech sector, focusing on patients and delivering products that drive sales. The company represents a key player in biotech stocks Canada.

How Reliable Is Information on Biotech Stocks?

It’s important to verify the information and content you consume about biotech stocks. Check the authors and always seek professional advice. Don’t forget to read the disclaimer when relying on third-party materials.

Are Canadian Biotech Stocks Popular Globally?

Yes, Canadian biotech stocks have a global presence including in countries like Germany, Australia, India, France, and Spain. Markets in Italy, Thailand, China, Hong Kong, and Japan also show interest in these stocks.

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Author card Timothy Sykes picture

Timothy Sykes

Tim Sykes is a penny stock trader and teacher who became a self-made millionaire by the age of 22 by trading $12,415 of bar mitzvah money. After becoming disenchanted with the hedge fund world, he established the Tim Sykes Trading Challenge to teach aspiring traders how to follow his trading strategies. He’s been featured in a variety of media outlets including CNN, Larry King, Steve Harvey, Forbes, Men’s Journal, and more. He’s also an active philanthropist and environmental activist, a co-founder of Karmagawa, and has donated millions of dollars to charity. Read More

* Results are not typical and will vary from person to person. Making money trading stocks takes time, dedication, and hard work. There are inherent risks involved with investing in the stock market, including the loss of your investment. Past performance in the market is not indicative of future results. Any investment is at your own risk. See Terms of Service here

The available research on day trading suggests that most active traders lose money. Fees and overtrading are major contributors to these losses.

A 2000 study called “Trading is Hazardous to Your Wealth: The Common Stock Investment Performance of Individual Investors” evaluated 66,465 U.S. households that held stocks from 1991 to 1996. The households that traded most averaged an 11.4% annual return during a period where the overall market gained 17.9%. These lower returns were attributed to overconfidence.

A 2014 paper (revised 2019) titled “Learning Fast or Slow?” analyzed the complete transaction history of the Taiwan Stock Exchange between 1992 and 2006. It looked at the ongoing performance of day traders in this sample, and found that 97% of day traders can expect to lose money from trading, and more than 90% of all day trading volume can be traced to investors who predictably lose money. Additionally, it tied the behavior of gamblers and drivers who get more speeding tickets to overtrading, and cited studies showing that legalized gambling has an inverse effect on trading volume.

A 2019 research study (revised 2020) called “Day Trading for a Living?” observed 19,646 Brazilian futures contract traders who started day trading from 2013 to 2015, and recorded two years of their trading activity. The study authors found that 97% of traders with more than 300 days actively trading lost money, and only 1.1% earned more than the Brazilian minimum wage ($16 USD per day). They hypothesized that the greater returns shown in previous studies did not differentiate between frequent day traders and those who traded rarely, and that more frequent trading activity decreases the chance of profitability.

These studies show the wide variance of the available data on day trading profitability. One thing that seems clear from the research is that most day traders lose money .

Millionaire Media 66 W Flagler St. Ste. 900 Miami, FL 33130 United States (888) 878-3621 This is for information purposes only as Millionaire Media LLC nor Timothy Sykes is registered as a securities broker-dealer or an investment adviser. No information herein is intended as securities brokerage, investment, tax, accounting or legal advice, as an offer or solicitation of an offer to sell or buy, or as an endorsement, recommendation or sponsorship of any company, security or fund. Millionaire Media LLC and Timothy Sykes cannot and does not assess, verify or guarantee the adequacy, accuracy or completeness of any information, the suitability or profitability of any particular investment, or the potential value of any investment or informational source. The reader bears responsibility for his/her own investment research and decisions, should seek the advice of a qualified securities professional before making any investment, and investigate and fully understand any and all risks before investing. Millionaire Media LLC and Timothy Sykes in no way warrants the solvency, financial condition, or investment advisability of any of the securities mentioned in communications or websites. In addition, Millionaire Media LLC and Timothy Sykes accepts no liability whatsoever for any direct or consequential loss arising from any use of this information. This information is not intended to be used as the sole basis of any investment decision, nor should it be construed as advice designed to meet the investment needs of any particular investor. Past performance is not necessarily indicative of future returns.

Citations for Disclaimer

Barber, Brad M. and Odean, Terrance, Trading is Hazardous to Your Wealth: The Common Stock Investment Performance of Individual Investors. Available at SSRN: “Day Trading for a Living?”

Barber, Brad M. and Lee, Yi-Tsung and Liu, Yu-Jane and Odean, Terrance and Zhang, Ke, Learning Fast or Slow? (May 28, 2019). Forthcoming: Review of Asset Pricing Studies, Available at SSRN: “https://ssrn.com/abstract=2535636”

Chague, Fernando and De-Losso, Rodrigo and Giovannetti, Bruno, Day Trading for a Living? (June 11, 2020). Available at SSRN: “https://ssrn.com/abstract=3423101”