1 UK stock I’d buy in 2022 to try to double my money

With UK stocks on the rise in 2022, Zaven Boyrazian shares his top pick from his own portfolio that could deliver triple-digit returns.

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For some UK stocks, 2022 has been a fairly decent year so far. Looking at just the FTSE 100, the index is up nearly 150 points as businesses continue to return to normality after the disruptions of the pandemic.

But not all stocks have had a great run recently. One in my portfolio has been hit particularly hard since the start of the new year. Yet despite this recent downward trajectory, I believe the company could be set for an explosive future over the long term. Let’s explore.

A rising star in the biotech sector

The biotechnology industry is renowned for its high-risk profile. Yet Oxford BioMedica (LSE:OXB) continues to impress me. At the core of this business lies the LentiVector drug development platform. Simply put, it enables large pharmaceutical companies like Novartis and Bristol Myers Squibb to develop new treatments at a lower cost.

The company generates income in the short-term through platform fees based on production milestones. But over the long term, if a drug developed on this platform makes it to market, Oxford BioMedica will receive royalties on each sale.

Only two drugs have made it to market so far, Kymriah, a treatment for blood cancer, and AstraZeneca‘s Covid-19 vaccine. But with 24 other drugs in development, the long-term potential for this biotech stock is enormous, in my opinion.

Over the last five years, revenue has grown by an average of 36% annually. And as forecasts for the gene therapy industry continue to rise, the stock of this UK biotech business has surged over 400% since 2017.

With a brand-new production-ready facility completed in 2020, the group’s capacity to take on new projects has drastically increased. And since management has already built a list of nine top-tier clients, finding these new projects should be relatively easy, in my opinion.

Taking a step back

As exciting as the growth prospects of this business may be, there are some notable risks to consider. The most prominent is the regulatory environment. Drug development is a long and arduous journey that often ends in failure. Even if a drug can make it past the regulators, its financial viability is not necessarily guaranteed.

To some extent, Oxford BioMedica is protected from this risk. After all, the company generates revenue throughout development even if a treatment eventually fails. However, if a drug doesn’t make it to market, the potential royalty income is lost, and that could cause long-term growth to stagnate.

Needless to say, a UK growth stock with wobbly growth prospects is prone to substantial volatility.

Can this UK stock double my money?

Looking at the latest half-year results, revenue for the first six months of 2021 grew by 139%, thanks to the high demand for AstraZeneca’s Covid-19 vaccine. When the pandemic ends, income from the vaccine will undoubtedly fall. But improved profit margins and newly enlisted clients, like Arcellx and Cabaletta Bio, could fill this future income void.

It seems other analysts agree with my bullish stance, with price forecasts for this UK stock at 2,400p. Compared to today’s price of 1,000p, that’s a potential gain of 140%. This is by no means guaranteed. But it does support my belief that the Oxford BioMedica share price can double in 2022. Therefore, despite the risks, I am considering adding more shares to my portfolio this year.

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

Zaven Boyrazian owns Oxford Biomedica. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

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