Use these three intriguing European picks to profit from the biotech boom

The International Biotechnology Trust's portfolio managers, Ailsa Craig and Marek Poszepczynski, tell BFIA where they would invest their funds

The pharmaceutical industry has been anchored by biotechnology companies since the mid-1990s. Many of these businesses have developed into successful enterprises in the modern era. We classify biotechs into three groups: development-stage, revenue growth, and profitable. We can find reliable investments with approved products that typically do well during recessions thanks to this classification.

Businesses that increase revenue are especially appealing. These companies have obtained regulatory approvals for their drugs and successfully completed the demanding clinical development process. Although they are making top-line sales, they have not yet made a profit, which makes them investments with a medium level of risk because they still have to establish themselves in the marketplace.

Biotechs now account for about 70 percent of new drug approvals, which is a significant shift from the days when pharmaceutical companies controlled this market through their in-house R&D departments.

With the help of generous funding and esteemed academic institutions, the US leads the world in biotech innovation, but Europe has some serious competitors. One European stock from each of our three categories will be featured.

Aid for those with hemophilia.

Let's start with Sobi (Stockholm: SOBI), a successful Swedish company that specializes in immunology and hematology. Its sales last year were £2.05 billion, and its market value is £10.7 billion.

Haematology, specifically treatments for patients with hemophilia, a chronic clotting disorder that primarily affects men, accounts for a significant amount of its sales. In order to stop uncontrolled bleeding, "clotting factors" VIII or IX must be infused.

The business recently introduced Altuvoct, a novel treatment that allows patients to receive an injection once a week instead of every two or three days due to its longer half-life. This is particularly practical for energetic young boys who are prone to bleeding injuries.

Sales of Altuvoct are expected to surpass £1 billion, bolstering Sobis's position as a major force in the biotech industry, in part because of a collaboration with Sanofi, a prominent French pharmaceutical conglomerate.

Our revenue-growth category includes Ascendis Pharma (Nasdaq: ASND), a Danish business that specializes in treating rare diseases. With a £10 billion market valuation, it is comparatively large. The company's distinctive sustained-release technology, which combines established biology with its own technology, has the potential to treat a wide range of uncommon medical conditions.

Patients have a far better experience because it maximizes therapeutic efficacy with significantly fewer injections. An intriguing revenue-growth stock with potential for profitability, analysts project a path to profitability as early as next year.

Finally, there is the riskier stock UniQure (Nasdaq: QURE). UniQure is a £700 million gene therapy startup based in the Netherlands.

Investing £300 million, UniQure is moving forward with its ambitious pipeline, which is specifically focused on Huntington's disease. Silencing the harmful Huntington protein that causes neuronal degeneration is the goal of UniQures gene therapy.

The recent designation of the gene treatment as a "breakthrough therapy" by the Food and Drug Administration (FDA) in the United States gives hope. However, there are significant risks involved; if clinical trials show insufficient efficacy, the company's share price may drop precipitously.