Biotech stocks have nearly doubled the gains of the Dow so far in 2017. The Nasdaq Biotechnology Index (Nasdaq: IBB) has risen 16.5% year to date, while the Dow has gained just 8.4%.

We expect the biotech sector to continue to grow, which is why we’re giving you our top biotech stock to own in 2017.

[ad#Google Adsense 336×280-IA]FactSet projects that biotech sales will increase from $107 billion in 2017 to $128 billion by 2019. That means consumers will be buying 20% more biotech drugs by 2019.

But not every stock in the biotech sector is a good investment. Finding the right biotech stock can be the difference between beating the market and losing money.

And Money Morning Executive Editor Bill Patalon knows how to find winners.

In August 2011, Patalon recommended Galapagos NV (Nasdaq ADR: GLPG), which is up 803% since then.

In 2012, Patalon saw a “Biotech Buyout Boom” approaching as companies needed to replace drugs that were losing their patents. He identified three stocks to buy, anticipating that they would buy out smaller biotech companies. His recommendations gained over 800%.

And now he has found a biotech stock that is expected to nearly double in price in the next 12 months…

One of the Best Biotech Stocks in 2017

In late May, the FDA approved Insys Therapeutics Inc.’s (Nasdaq: INSY) new cannabis-based medication for the treatment of nausea and vomiting associated with chemotherapy.

The market for the new cannabis-based medication, Syndros, is huge. The National Cancer Institute reported that the number of cancer patients in the U.S. during 2014 was nearly 15 million. Eighty percent of those patients experienced nausea and vomiting related to chemotherapy treatment.

Dronabinol, the active ingredient in Syndros, has also been shown to be effective in treating pain.

And the pain treatment market is even larger. Transparency Market Research reports that the pain treatment market was worth $60 billion globally in 2015. That number is expected to climb to $80 billion by 2025, a 33% increase.

With the FDA approval of its newest drug, Insys is working at the convergence of two trends. They are medical marijuana and the “war on pain” (the push for non-opioid pain killers).

“Insys has big upside because it’s trying (and, so far, succeeding with flying colors) to work at the ‘convergence’ of those two powerful trends,” said Patalon.

Taking the war on pain one step further, the company is working on a drug to reverse opioid-induced depression. Naloxone Sublingual Spray is in phase 3 clinical trials.

The longer people use opioids, the greater the chance of them becoming depressed. Science Daily reports that people using opioids for three months are more than 50% likely to become depressed than those who use it for a shorter period of time.

And if Insys’ new drug is approved, it will also have a large market. In 2013, 207 million opioid prescriptions were written in the United States, according to National Institute on Drug Abuse data.

Insys’ new drugs have Wall Street analysts bullish on the company’s prospects.

Analysts estimate that Insys revenue will grow by 33% in 2018. And they expect earnings to increase 28% a year for the next five years.

So far this year, INSY has risen nearly 45.6%. But the stock could head much higher over the next year.

Analysts have a one-year price target of $16.40, which is a gain of 22% from its current price of $13.40 per share. But some analysts have the stock going as high as $26, which would be a gain of 94% in the next 12 months.

Bottom Line: Insys is one of the best biotech stocks to buy in 2017. Its new drug is expected to be on the market in a few weeks. This drug puts the company at the convergence of medical marijuana and the war on pain trends. Patalon expects this stock to continue to gain throughout the year and beyond.

— Money Morning News Team

[ad#mmpress]

Source: Money Morning